The macro impact of the epidemic on gold futures

The impact of Covid-19 on gold futures has been well-documented by a variety of authors and researchers. Spilker (2022) underlines how the relative performance of gold ‘stood out’ during the turbulent times. The information provided by Comex (NYSE) database evaluates how gold futures prices have fared against real interest rates (as represented by H15X5YR Index):

Source: CME (Comex) NYSE, 2022

The above graph is an indication of how gold futures have fared against the non-inflation index. With the future of Covid-19 currently being uncertain and in the wake of international tensions in Ukraine and a potential of conflict in Taiwan, investment in gold futures could be considered as a safe haven for the investors (Spilker, 2022).

However, one could not reject the impact of macro indicators on the overall volatility in the price of gold futures. As evaluated by Hu et al. (2020), various factors such as economic policy uncertainty, default spread, investor sentiments and overall market volatility have a direct impact on the gold futures prices. Gold futures are more reactive to the macro factors. When markets are under stress, gold has the probability of outperformance. The overall investment sentiment has changed towards some of the equity stocks which had provided high returns in the past. The comparison of gold futures as against major equity indices is illustrated as follows:

Source: CME (Comex) NYSE, 2022

If the trends during the lockdowns are studied, there are various indicators when the prices had increased (of gold futures) (CNBC, 2020). At a time when other traditional investment alternatives such as equity were witnessing significant falls, gold futures continued to increase in value, thereby implying that on a macro level, the investor sentiment is favourable towards gold as a commodity. This is further emphasized by taking account of Bitcoin/Gold ration wherein the cryptocurrency has lost almost half of the value since November 2021 but the trend in gold futures continue to be strong (Spilker, 2022).

Since the economy is moving back towards normalcy, one could not completely write off the probability of future volatilities. Hence, gold futures can continue to gain value largely due to the fluctuations in the prices of other securities and the inherent safe nature of gold as a commodity. This is something which has been underlined through the price analysis of gold futures in the past couple of years along with findings of different researchers and scholars.


CNBC. 2020. Gold gains as surging virus cases eclipse positive US data. [online] Available at: <> [Accessed 30 March 2022].

Hu, M., Zhang, D., Ji, Q. and Wei, L., 2020. Macro factors and the realized volatility of commodities: A dynamic network analysis. Resources Policy, 68, p.101813.

Spilker, G., 2022. Gold’s Relative Performance Stands out in Turbulent Times. [online] CME Group. Available at: <> [Accessed 30 March 2022].

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