How Has Coverage of the COVID-19 Pandemic Affected Oil and Gold Prices?

As a result of the COVID-19 outbreak, nations have quarantined regions and closed their borders, which has restricted trade between nations and slowed economic activity. The effect of the pandemic on oil and gold prices was studied in the journal Resources Policy.

Study: Atri, H., et al. (2021). The impact of COVID-19 news, panic and media coverage on the oil and gold prices: An ARDL approach. Image Credit: rawf8/

Financial markets have declined and become exceedingly volatile since the COVID-19 outbreak, followed by a decline in oil and metals prices. This illness has also caused an unprecedented decline in commodities markets, which are fluctuating in response to pandemic news, crippling economies. 

The pandemic has wrought havoc on transportation-related energy supplies, notably oil. Prevention methods such as travel bans and transportation halts (cars, boats, and aircraft) have thrown supply chains into disarray and resulted in a historic drop in oil consumption.

The oil price, particularly, plummeted at the worst possible time in 2020. Oil demand was significantly impacted by protective measures adopted to minimize the new Coronavirus, but it was not the only reason. Other worldwide factors, such as tensions among oil-producing countries, are also still contributing to the continued oil price slump.

Oil Export Prohibition during Pandemic

The oil export prohibition (OPEC summit) triggered market destabilization and an oil collapse in the face of plentiful oil production. As a consequence of all these emergency measures, not only did energy consumption fall but so did metals demand.

Metals prices, which are directly connected to global economic activity, plummeted in early 2020 as supply and logistical systems were disrupted, and exports were limited. As a result of these circumstances, investors are becoming increasingly concerned about the rise in commodity prices during this worldwide health crisis. Alternatively, despite the increase of COVID-19 instances, the gold price was quickly rising.

Exasperated international investors looking for a safe haven asset amid market instability sought sanctuary in precious metals like gold. As a result, the gold market has risen.

The COVID-19 Global Fear Index (GFI) was created using two factors: reported cases and fatalities. They looked at how well this index predicted the price returns of metals (such as gold) and agricultural products. The findings show that the fear index and commodity price returns have a positive association.

Little empirical work has yet been published that explicitly correlates the COVID-19 panic index to the price of crude oil or gold.

Effect on Oil and Gold Price

According to Model 2-O, the announcement of the first coronavirus deaths did, in fact, trigger a short-term drop in oil prices. Nevertheless, despite rumors of deaths, the crude oil price eventually rebounded once the COVID-19 lockdown was lifted and commercial operations resumed.

This research suggests that the COVID-19 media coverage has a favorable influence on the oil market's dynamic in the short run. However, the oil price declines in the long run as a result of the media's propaganda, which continues to focus on the virus's dangers.

Video Credit: TD Ameritrade/

There is evidence of a long-term association between gold price, COVID-19 news, media attention, financial volatility, and economic instability in the United States. The COVID-19 deaths, as well as the fear caused by the pandemic's news, can only have a short-term impact on gold prices.

In contrast to past findings on oil prices, the findings show a positive long-term link between the number of new Coronavirus cases and the price of gold. Furthermore, studies show that the present gold price is influenced by previous prices. Similarly, we see that the number of new cases has a delayed beneficial impact on the gold price.

The ARDL technique, which is still a relevant post-division of the population because the number of data points is more than 30 for both phases, shows how COVID-19 new cases impact oil and gold prices over time depending on the illness phase.

These findings are explained by the fact that the increased number of newly infected cases reported and the seriousness of COVID-19 prompted protection mechanisms (lockdown, social distancing, travel disruption, factory closures), which resulted in a decrease in demand for oil rather than an abandonment of supply because oil extraction sites continued to function at the start of the phase.

Using the ARDL technique, it was shown that COVID-19 fatalities and panic had a negative impact on crude oil prices from January 23, 2020, to June 23, 2020. The media's misinformation also had a long-term detrimental influence on oil prices.

The COVID-19 new infections, fatalities, and media attention all have a favorable influence on the gold price, on the other hand, according to the empirical findings. The finding shows that, unlike gold, the price of oil is susceptible to adverse news. Gold, which is hedging against geopolitical and economic disasters, has also been a safe haven during the COVID-19 health crisis.


Atri, H., et al. (2021). The impact of COVID-19 news, panic and media coverage on the oil and gold prices: An ARDL approach. Resources Policy.

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Akhlaqul Karomah

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Akhlaqul Karomah

Akhlaqul has a passion for engineering, renewable energy, science, and business development.


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