As with the financial crisis, investors also initially flee into the US dollar in the corona crisis. That doesn’t have to be logical. It is a typical pattern: for fear of an uncertain future, everything is initially sold: stocks as well as precious metals. Certainly partially liquidity-driven. This is the classic panic phase. Here investors are simply caught on the wrong foot and panicked. The market is still in this phase. But it should gradually come to an end.
First aid measures
The first aid measures on the part of the central banks or governments then begin. The first panic evaporates. But there are massive doubts whether these relief measures will work. In this phase, doubts also arise as to whether the massive printing of money by the central banks will ultimately lead to a devaluation of the paper money currencies.
This is the phase in which gold begins to rise. We should enter this phase in the coming weeks when the first panic subsides.In the next phase, market participants notice that not everything is as bad as it has indicated. The first positive news is coming into the market, the fear of a meltdown in the economy or the financial system is disappearing and investors are returning to the stock markets. DAX, Dow Jones and Co begin to rise again.