· Gold prices hit their highest in seven years on Friday and were set to post their best week in over six months as demand for the safe-haven asset increased after a spike in coronovirus cases.
South Korea reported 52 new cases of the virus, taking the national total to 156, while Japan reported the first fatalities from aboard a cruise ship that accounts for the biggest cluster of infections outside China.
Spot gold rose 0.7% to $1,630.97 per ounce by 0649 GMT, after hitting its highest since Feb. 15, 2013 at $1,631.63 earlier in the session. For the week, prices have risen 2.9% so far and were set to post their biggest weekly percentage gain since Aug. 9.
U.S. gold futures were up 0.9% at $1,634.30.
· “Main focus for gold seems to be the virus uncertainty ... and it’s spread across the world,” said John Sharma, an economist at National Australia Bank.
“This is spreading some fear ... not very encouraging in terms of growth, investment, consumer and business confidence.”
Asian shares fell as virus concerns caused funds fled to the sheltered shores of U.S. assets, lifting the dollar to three-year highs.
China reported an uptick in new coronavirus cases on Friday, boosted by more than 200 people testing positive in two prisons outside of Hubei province.
· Further spread of the epidemic could derail a “highly fragile” projected recovery in the global economy in 2020, the International Monetary Fund warned on Wednesday.
China cut the benchmark lending rate on Thursday to soften the virus’ impact on its economy and is likely to roll out more measures.
· Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.25% to 933.94 tonnes on Thursday, its highest since November 2016.
· Spot gold may rise into a range of $1,639-$1,667 per ounce, said Reuters technical analyst Wang Tao.
· Gold Price Analysis: Lower high, overbought RSI check buyers inside short-term rising channel
Gold prices stay mildly positive around $1,621 during early Friday. The yellow metal has been flashing a lower high formation since its pullback from $1,623.80 while MACD is also likely turning negative. Further to support the odds of a pullback are RSI conditions that signal a halt to the additional upside.
As a result, the bullion may decline to Wednesday’s high of $1,613 while the support line of a short-term rising channel, at $1,611 can question extra downside.
If at all the quote dips below $1,611, $1,605 and $1,600 can entertain the bears ahead of recalling the early-week levels surrounding $1,584/83.
Meanwhile, an upside break of $1,623 can trigger fresh run-up towards the channel resistance of $1,627.
During the precious metal’s additional rise past-$1,627, the rising trendline connecting highs marked during September 20119 and January 2020, close to $1630/31, will be in the spotlight.
· Among other precious metals, palladium fell 0.6% to $2,675.10 an ounce. However, the metal was up nearly 10% this week, set for its strongest week in over a month.
The autocatalyst metal had risen to a record high of $2,841.54 earlier in the week on supply concerns.
“Low inventories from a structural market deficit and limited scope of a supply response should keep demand strong,” ANZ analysts said in a note.
Silver was up 1% at $18.53 and was set to register its best week since week ended Aug. 30. Platinum rose 0.1% to $979.04.
Reference: Reuters , FX Street
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