During the height of the pandemic, the price of gold reached a 10-year high. Prices have fluctuated since, but they have remained far above 2019 prices for the last three years, with another major price spike in march of 2022. That rise in trading price was accompanied by an increase in business for online retailers of gold and other precious metals.
Why did gold prices spike during the pandemic, what drove it to spike again this year, and why are online dealers and retailers attracting more customers during this period? This article will go over the key reasons behind these recent changes to the precious metal retail market.
Reason #1 – Gold is a safe haven
Gold being used as a safe haven during times of economic and political uncertainty is a human tradition at this point. It’s fairly common for gold prices to go up whenever there are wars, pandemics, revolutions, and any other global events that bring into question the safety of other investments.
This happens because gold — along with other precious metals — is expected to maintain its value even in times of soaring inflation and economic collapse. Gold prices also tend to remain stable even as stock prices collapse.
Gold’s status as a safe haven is a big reason why the demand for gold and other precious metals spiked in July of 2020, in the aftermath of the first wave of COVID lockdowns. The second spike in 2022 was likely caused by the invasion of Ukraine earlier in the year.
Reason #2 – Buying gold online is safer
Online gold dealers and retailers saw a big increase in customer demand in the last few years. One of the reasons for that is due to the pandemic lockdowns pushing a large segment of the market towards online shopping.
Going to a physical store isn’t as appealing when there is an airborne virus going around, and many physical locations that were closed during the lockdowns never opened again.
In other words, online gold retailers are growing because the online retail sector at large is experiencing a lot of growth. This has specifically benefited well-established online retailers like SD Bullion, as consumers favored online gold dealers that had been in the market long enough to build a positive reputation.
Reason #3 – Online shopping is more convenient
The problem with blaming the growth of online retail on the pandemic is that the growth didn’t stop after the lockdowns did. What drove customers to keep buying gold and other goods online even after regular stores had reopened?
Trying to find a singular answer to that question is pointless. Customers had all sorts of reasons why they didn’t shop online before, and they have all sorts of reasons why they shop online now. For example, a 2021 report by Statista.com found that the ability to shop 24/7 and the convenience of not having to leave the house are two key reasons why people shop online.
It also helps that the lockdown pushed brands big and small to launch online versions of their stores. Many local brands and items that were once only available in brick and mortar stores were suddenly made available for delivery.
Some have posed that the pandemic has only boosted a process that was already happening naturally. And that the convenience of online shopping would eventually lead the market to the level of adoption we have today. It’s impossible to know for sure if that is the case, but that theory is far from outlandish.
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