Gold set for best month in five as virus stifles risk appetite
· Gold prices rose on Friday and were heading for their best month in five as worries over economic growth due to the fast-spreading coronavirus boosted appetite for safe havens.
· Supply-squeezed palladium, meanwhile, was on track for its biggest monthly percentage gain since November 2016.
· Spot gold was up 0.8% at $1,585.66 per ounce by 01:55 p.m. EST (1855 GMT). The metal has gained more than 4% so far this month.
U.S. gold futures settled 0.1% lower at $1,587.90.
· “Coronavirus continues to be a strong factor of support as we are seeing global growth concerns hurting other markets across the board. As a result, we’re seeing safe-haven demand drive into gold,” said David Meger, director of metals trading at High Ridge Futures.
“Gold is the quintessential safe-haven asset that money managers are viewing as an alternative for cash.”
· The World Health Organization declared the epidemic a global emergency after the virus killed more than 200 people.
· “At this point, it’s not something the Chinese economy can shrug off. There will be a hit to growth, the magnitude of which will be difficult to chisel out in detail for quite a while,” said Ilya Spivak, a senior currency strategist at DailyFx.
· The virus fears gripped financial markets, overshadowing the latest batch of upbeat corporate earnings.
“Gold is both continuing to find favour as a traditional safe haven and, at the same time, run into strong resistance on the run-up to $1,600, which is keeping a lid on gains,” OANDA analyst Craig Erlam said in a note.
· On the physical side, however, an extended holiday in top consumer China due to the outbreak dimmed activity in Asian bullion hubs.
· Auto-catalyst palladium, which is in short supply, has risen 18% so far this month, having hit a record high of $2,582.19 per ounce on Jan. 20. On the day, palladium was down 1.2% at $2,283.19.
· “Palladium prices have really been in their own world ... there is lot of demand for it in a tight supplied environment. We are seeing what industrial demand can do for prices,” High Ridge Futures’ Meger said.
· Silver rose 1.1% to $18.02 an ounce. Platinum dipped 1.9% to $959.33 and was on track for its worst week since early November.
Reference: Reuters
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