Global stock markets have almost inevitably recorded their worst quarter since 1987, as the coronavirus continues to keep Europe and parts of Asia under lockdown and hinder economic activity and societal norms.

The UK’s FTSE 100 lost 25% between January 1st and March 31st, while America’s Dow Jones lost 23%. The S&P 500, a much broader index in the US, lost 20% - its worst showing since the financial crisis in 2008.

Monday saw another temporary suspension of Wall Street trading, with the Dow Jones Industrial Average closing down by 12.9% and the S&P 500 down 12%. In London, the FTSE 100 index closed down by 4%.

At the end of 2019, the Global Economic Conditions Survey (GECS) predicted a steady 3% growth in world trade. Poor Q1 figures plus the unprecedented impact of Covid-19 has dashed any such hopes, and many nations - including the UK, Germany and Japan - are expecting to report they are officially in recession later this month.

On Tuesday, the United Nations warned of the devastating global socio-economic effects of Covid-19, with UN Secretary-General António Guterres saying the world faces “the nightmare of the disease spreading like wildfire in the global South, with millions of deaths and the prospect of the disease re-emerging where it was previously suppressed”.

It might not just be the global south that’s punished by Covid-19 however. The United States is yet to enter full lockdown, and both the infection rate and mortality rate are rising rapidly day by day. Vice-president Mike Pence told a press conference last night that the virus outbreak was in their hands (an ironic choice of words) and that they expected a similar infection rate and model to that of Italy - currently the world’s most affected nation.

Despite the current concerns regarding the virus pandemic, gold has actually fallen in the past week; down from the all-time Sterling high of £1,371.48 per ounce to £1,278.81 per ounce. Volatility similar to this occurred in 2008/09, and the current pressures on safe haven demand include talk of a vaccine being ready for early 2021, the belief that China’s economy has instantly rebounded now that it is beginning to resume near-normal levels of productivity, and an announcement from Russia that it will be pausing central bank gold buying.

“It’s absolutely crazy what’s going on… Right now, if somebody wants to buy gold, I wish them all the best in finding it. Most of the bullion dealers are closed.”

Ludwig Karl, board member, Swiss Gold Safe speaking to Bloomberg

The combination has hit gold’s price, but the shutdown of many mines and refineries is limiting precious metal supply, which should help push the price of gold and silver back up. Volatility is the key word in that last paragraph though. Central banks and governments, including the US, UK, China, Singapore and New Zealand, are orchestrating huge fiscal support to maintain economic stability. This, with low interest rates, has helped reduce the opportunity cost of holding a zero-yield asset like gold, and has provided levels of cash that were previously requiring asset sales to generate the necessary funds. These margin calls are still impacting gold and contributing to price movement, but those in the bullion industry will be hoping that precious metals will consistently move up in value over the next 6-12 months as the full extent of the coronavirus impact to the world economy is realised.