The coronavirus pandemic has brought with it another scare in the name of recession, marking widespread disruptions in trade, and a sharp drop in overall prices of commodities, with the exception of gold.
While other metals’ market value took a severe beating, gold prices witnessed a significant surge owing to heightened risk-off sentiment, highlighting the importance of the yellow metal as a safe asset.
Prices of commodities like turmeric and jeera fell down to a three-year low. However, analysts are by and large unanimous in their views that agri-commodity prices would bounce back as soon as mandis open and export routes become operational.
Due to widespread lockdown, demand destruction and shutdown of factories across the world led to a sharp drop in export demand for metals, food grains and spices. As warehouses got shutdown due to the lockdown, the manufacturers are struggling to bridge the demand supply gap, with the global scenario of exports pushing even countries like Japan, the world’s third largest economy into recession, as a major share of their country’s GDP comes from exports.
The economic disruption due to the pandemic has derailed global growth prospects and raised recession worries. There are expectations that the Covid-19-driven contraction in economic activity will lead to a painful recession across the world.