Multiple factors apply to the global economic condition, with markets recently fluctuating from the introduction of Coronavirus. It’s prompted numerous financial analysts to recommend investors safe-haven currencies. Those are typically advised to be Gold, Silver and the Japanese Yen. There are associated risks with engaging the Japanese Yen, as the democratic island is located close to the Wuhan region on a worldwide scale. Investor uncertainty has prompted global fear on subsequent markets, resulting in billions being lost within the last several days. Volatile assets have experienced immediate declines, and standardized currencies are witnessing lower trading volumes. This follows after the market was already following marginal declines with the potential war between Iran and the United States. Investors are beginning to retaliate to global conditions and move their funds to these respective safe havens. The result could be a potential economic collapse for digital currencies like Bitcoin, Ethereum and Litecoin.
Throughout January, investors witnessed increasingly aggressive behaviour between the United States and Iran. It prompted for more than 100+ global citizens to be killed in a shot-down aircraft flying over Iran airspace. Following the decrease in aggression, it took less than two weeks for another global scare to arise in the form of Coronavirus. Chinese digital markets have immediately lost billions throughout the last week, with Shanghai and Hong Kong expected not to recover for upwards of six months.
The Japanese Yen
Most investors aren’t taking the recommendations of financial analysts when it pertains to the Japanese Yen. Most trading in today’s markets is rethinking what this currency has to offer, which has followed since the trade deficit began in Japan. Domestic managers in Japan have also increased the associated costs with foreign asset trading. Subsequently, those that used this market for safe-haven purposes would pay a substantial fee to trade their funds back to original markets.
Wuhan, it’s a location that billions worldwide have become familiar with over the last week. Being the central infection zone for Coronavirus, it’s spread across the globe and affected thousands. This saw Chinese markets immediately impacted, which strengthened global currencies like the GBP and USD. It’s shocking to see investors move funds over to Great Britain, considering that Brexit was finally approved.
It should be noted that multiple foreign exchange pairings like the USD/JPY have seen daily declines. This pairing is anticipated to hit its all-time low by February 5th. Markets in China will continue to crash rapidly, with the outbreak having no immediate end in sight.
Stability with Gold
The most magnificent safe haven for any investor following a global crash in markets is gold. Moving funds over to gold assets guarantee that investment returns won’t be lost. Throughout the last hundred years, the Gold & Silver markets haven’t experienced global crashes. The associated cost with removing funds from metal and mineral industries in minimal. Using this form of a safe haven is so popular that brokerages operating in the mineral market advertise their products for protection. Once genuine quarantine efforts with the Coronavirus are complete, global investors can return to prior markets and continue their investment opportunities.