Gold climbs over 2% to 7-year high as virus spreads rapidly

Gold prices rose more than 2 per cent on Monday to their highest in over seven years, as a spike in coronavirus cases beyond China pushed investors to take refuge in the safe-haven metal.

FUNDAMENTALS

Spot gold rose 1.2 per cent to $ 1,662.37 per ounce by 0059 GMT, having touched its highest since Feb. 7, 2013 at $ 1,678.58 earlier in the session.

US gold futures rose 1 per cent to 1,665.40.

Concerns about the spread of coronavirus outside China grew on Sunday with sharp rises in infections in South Korea, Italy and Iran.

Also considered a safe-haven, the US dollar edged higher as the rapid spread of the virus beyond China drove fears of a pandemic and weighed on Asian currencies and global equities.

The World Health Organization (WHO) is concerned about the number of infected cases with no clear epidemiological link, although the total number of cases outside China remains relatively small, its director general said on Saturday.

China is tracking big data on an array of industrial barometers such as power use and traffic flows to take the pulse of general activity and target stimulus measures aimed at mitigating the impact of the virus on its struggling economy.

China will step up policy adjustments to help cushion the blow to the economy from the outbreak that authorities are still trying to control, President Xi Jinping was quoted as saying on Sunday.

Finance chiefs of the world’s top 20 economies vowed to monitor the virus impact on global growth and act if needed, as they said loose monetary policy and easing trade tensions would prompt a pick-up in 2020 and 2021.

India has clarified the nature of a gold discovery in Uttar Pradesh, after a government official said on Saturday that fields with reserves of more than 3,000 tonnes of gold ore had been found, prompting a flurry of activity on social media.

Speculators raised their bullish positions on COMEX gold and silver contracts in the week to Feb. 18, the US Commodity Futures Trading Commission (CFTC) said on Friday.

Palladium inched up 0.2 per cent $ 2,709.01 per ounce.

Silver rose 0.9 per cent to $ 18.62 an ounce, while platinum eased 0.1 per cent $ 972.70.