Gold on track for a modest weekly gain as investors seek handle on coronavirus outbreak
Gold edged higher Friday, on track for a small weekly rise as investors attempted to gauge the economic impact of the spread of COVID-19 in China.
“Traders continue to weigh up just how detrimental COVID-19 will be to the global economy,” said Craig Erlam, senior market analyst at Oanda. “It’s been interesting to watch investors navigate their way through this crisis as it was evident very early on that the scale of it would likely be unknown for a while at least.”
“We had the inevitable panic to begin with and then, as the reality became worse than feared, calm was restored and stock markets found themselves back in record territory,” he said in a market update. Gold on Friday moved up as U.S. benchmark stock indexes traded modestly lower.
Gold for April delivery GCJ20, +0.36% on Comex rose $6.100, or 0.4%, to $1,584.90 an ounce, with prices for the most-active contract looking at a weekly rise of 0.7%. March silver SIH20, +0.72% gained 14.1 cents, or 0.8%, to trade at $17.76 an ounce, poised for a gain of around 0.3% for the week.
“Gold is creeping higher and approaching the heavily guarded $1,600 barrier,” said Erlam, noting that events in the Middle East last month saw gold briefly break through the defence.
If prices can get through $1,590, “then perhaps the bullish case will grow,” he said.
Increased concerns over China’s viral outbreak have served to underpin gold and other haven assets, particularly when equities and other assets perceived as risky come under selling pressure.
“The upward move in gold has been proportionate to the downside percentage move in global stock markets. The metal’s broadly positive trend continues, and should the bullish move continue it might target the $1,593 area,” said David Madden, market analyst at CMC Markets, in a note.
China on Friday said 121 more people had died from COVID-19, the disease caused by a novel coronavirus that emerged in Wuhan in late 2019, over the previous 24 hours, bringing the total to 1,381. The country’s National Health Commission reported 5,090 new confirmed cases in mainland China, bringing the total to 63,851. The number of new cases jumped sharply on Thursday after a change in the government’s counting method.
In other metals trade, April platinum PLJ20, -0.76% fell by nearly 0.9% to $966.30 an ounce, while March palladium PAH20, -0.37% shed 0.2% to $2,346.50 an ounce.
March copper HGH20, -0.59% was off 0.6% at $2.5975 a pound.
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