Gold rises as coronavirus fears drive investors to safe haven
London (Mar 5) - Gold prices rose on Thursday as coronavirus cases continued to spread around the world, exacerbating concerns about the global economic impact of the epidemic and prompting investors to seek refuge in the safe-haven metal.
Spot gold was up 0.7% at $1,646.73 per ounce by 1056 GMT. U.S. gold futures rose 0.2% to $1,645.80.
“The virus is really taking over... I think the markets are a bit nervous, (gold is) more prone to higher prices and is well supported on the downside,” said Afshin Nabavi, senior vice president at precious metals trader MKS SA.
“At the moment, it looks like it’s going to have very negative effects on businesses, tourism, travel and smaller businesses. So I think the economy is going to be hurting big time.”
The International Monetary Fund said on Wednesday the global spread had crushed hopes for stronger growth this year, while a Fed report showed there were signs the epidemic had begun to weigh on business sentiment in the United States.
European shares fell again on Thursday, taking their cue from U.S. equity futures, which implied a lower open for Wall Street as cases of the coronavirus surged in the United States.
The American coronavirus death toll rose to 11 on Wednesday, and California declared a state emergency. U.S. lawmakers have approved an $8.3 billion emergency bill to help contain the virus.
There are now more than 90,000 “COVID-19” coronavirus cases globally, with over 3,000 deaths.
The European Central Bank is expected to cut interest rates by 10 basis points next week, joining its peers in the United States, Canada and Australia.
The dollar eased against rivals, making gold cheaper for holders of the greenback, while the U.S. 10-year treasury yield fell back below 1%.
Spot gold looked neutral in a range of $1,631-$1,653 per ounce, Reuters technical analyst Wang Tao said.
Meanwhile, palladium slid 3.3% to $2,491.60 per ounce.
“The auto sector supply chain will be impacted by COVID-19. Although, this demand shock is expected to have limited impact on palladium due to a structural deficit backdrop, we see room for further setbacks following the recent rally,” ANZ Bank analysts said in a note.
The autocatalyst metal slumped as much as 13% on Feb. 28, following a record run to an all-time high of $2,875.50 the day before due to a stark supply shortfall.
Silver was up 0.3% to $17.23 per ounce, while platinum shed 0.9% to $864.36.
Reuters
