The Bank of England today shocked investors and the public alike with news that the UK interest rate would drop to an all-time low of just 0.1% - an unmatched figure since the BoE first started in 1694.

The announcement also revealed that the Bank would restore quantitative easing, promising to buy £200 billion of UK financial assets.

The Bank's new governor, Andrew Bailey, spoke to the press today saying: “The obvious increase in the pace and severity of Covid-19, which has built during the week, was something we had to assess and respond to, we can’t wait for the hard economic data before we act”.

Gold's price shot up yesterday to from £1,240 per ounce to £1,297.77 as the Pound fell to a 35-year low against the US Dollar, with the Bank of England bracing itself for crisis. In the face of the Covid-19 coronavirus, investors chose to opt into gold and other precious metals, as well as Chinese bonds and the US Dollar to protect themselves for the coming weeks and months.

Today's response saw a 2.8% rise in the Pound's value against the Euro to €1.0933, and a 1.3% rise against the US Dollar to $1.1772. Despite the gains, Sterling remains at very historically low levels against these competing currencies, and the Bank of England will be desperate to do all it can to avoid parity or worse.

Global markets have all benefited slightly from similar interest rate cuts and other methods of stimulus, but the past three weeks have been a huge hit to the major markets, with the Dow Jones' current trajectory – below – worse than that of the 1929 Wall Street Crash.

Deutsche Bank have already warned of the worst economic slowdown across the world since the end of the Second World War, and many economists expect major nations including the UK, Germany, France, Italy and Japan to enter recession next month once official figures are released.

Gold's volatility, as with other metals, has been similar to that experienced 12 years ago as the financial crisis wreaked havoc. Asset liquidation has led to a tug of war battle for gold prices, with consumer demand driving the price up and sales for margin calls pushing it back down.

"As a high quality, liquid asset gold may also have been used to raise cash, especially since it was – until recently – one of the few assets with positive returns this year. Gold was up 10% as of 9 March, more than any other major asset classes."

- World Gold Council

Central banks are already issuing billions in their respective currencies for bailouts and other business aid however, and budget deficits are set to rapidly grow – aside the pre-existing recession fears.

As the quote from the World Gold Council above states, gold has been one of the best performing asset types in recent times, even with its fluctuations. The WGC believes that while the coronavirus crisis and the resulting isolation will ultimately reduce consumer demand for precious metals, history suggests that this will eventually be offset by investor demand for safe haven assets – especially when considering low interest rates, low yields, and the resulting low opportunity cost of gold.