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New York, NY—Investors have been flocking to gold as a safe haven amid fears of the coronavirus pandemic’s impact on the global economy. The resulting price rally, coupled with quarantines and other pressures on consumer demand, has pushed jewelers, coin, and bar dealers in China and India—both heavy gold-consuming markets—away.

Bloomberg last week reported that Western investors are more than making up for the drop in physical demand in the East, part of what’s pushing gold prices to an eight-year high. 

Spot gold prices have risen 20% so far this year, breaching the $1,800 mark on June 30. Analysts have been predicting the metal to top $2,000 before year’s end, but some went even further out on a limb, suggesting the potential for more than $4,000 based on comparisons with historical economic patterns.

Related: $2,200 Gold Sounds Scary? Experts Are Talking About $4,000 and $5,000

Analysts also thus far expect U.S. and European investors to remain interested in gold, even if Asian demand falls. 

Meanwhile, gold paused on this week’s promising news of a potential COVID-19 vaccine. At press time it was trading at $1808. A TD Securities commentary on Kitco.com, however, says the respite is temporary, because even if the vaccine is successful and consumer confidence returns, inflation is likely to return with it, further supporting higher gold prices. Likewise, a weaker U.S. dollar and rising geopolitical tensions will continue to support higher gold prices.

For many consumers, the combination of higher gold prices, lockdowns, job losses, and economic growth have put a curb on discretionary spending.  

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