After the outbreak of the COVID-19, we are now all epidemiologists! But what does an “epidemic” really means? Well, it is an outbreak of disease that spreads quickly and affects many individuals at the same time. What is important, an epidemic refers to a sudden increase in the number of cases of a disease above what is normally expected, or to diseases that have grown out of control. So, a regular, seasonal flu is normally not called an epidemic, although it may affect many people. But when the flu virus mutates and infects much more individuals than normally expected, then it becomes epidemic.

The epidemic occurs when people do not have immunity to a new pathogen (or their immunity to an established pathogen decreased significantly). The latest example is, of course, COVID-19 caused by a new coronavirus called SARS-CoV-2 that passed from animals (possibly bats or pangolins).

Epidemic and Gold


What is the link between epidemic and gold? Well, gold may be a safe-haven asset during an epidemic, as disease outbreak disrupts the economic activity and increases the uncertainty, leading sometimes to a stock market correction. However, a lot depends on a particular epidemic. If it is a local epidemic limited to developing countries, then any impact on the gold market should be limited and short-lived.


The best examples are Middle East Respiratory Syndrome (MERS) and West Africa Ebola virus. The former epidemic originated in 2012 in the Middle East and just like the COVID-19 and SARS, the MERS was caused by the virus from the coronavirus group. It was likely transmitted to humans through camels and was very deadly, as its fatality rate was 34 percent. However, only 2,506 cases and 862 deaths were reported from 2012 to January 15, 2020. The peak of infection and the peak of interest occurred in April – May 2014. As the chart below shows, gold prices actually declined during the peak of MERS pandemic, which was probably caused by the limited geographical scope – the majority of cases were reported from Saudi Arabia and other countries in the Eastern Mediterranean.

Chart 1: Gold prices during MERS epidemic (London P.M. Fix, in $).

Epidemic and gold chart

The latter epidemic was the West African Ebola virus. It originated in December 2013 in Guinea and lasted until 2016. According to the official data, there were a total of 28,646 suspected, probable and confirmed cases and 11,323 deaths (case-fatality rate of 39.5 percent. The interest in Ebola virus started to rally in summer 2014 and remained elevated through the whole year, with the culmination in October. But as the chart below shows, gold prices decreased in that period. The probable reason of the gold’s bearish reaction is the fact that the pandemic was contained to, as the name suggests, West Africa (mainly in Guinea, Liberia, and Sierra Leone), which is neither the major financial center nor the industrial center.    

Chart 2: Gold prices during Ebola epidemic (London P.M. Fix, in $).

Epidemic and gold chart

In contrast, the COVID-19 was more positive for the gold prices, as it affected practically the whole globe, including the industrial and financial powerhouses such as China and the US. The chart below shows that the price of gold increased amid the outbreak of COVID-19 until the pullback in mid-March. However, as the COVID-19 is far from being contained, the gold prices may rise further in the future.

Chart 3: Gold prices during COVID-19 pandemic (London P.M. Fix, in $).

Epidemic and gold chart

Epidemic and Silver
As silver is highly correlated with gold, its price should follow the gold prices. However, silver is also an industrial metal. So, epidemic can be worse for silver’s performance than for gold’s performance. Indeed, as the chart below shows, the price of silver declined from January to mid-March, rising only shortly in the second half of February. 

Chart 4: Gold prices during COVID-19 pandemic (London Fix, in $).

Epidemic and gold chart