Gold rises to over 2-week high as China virus spreads

Monday,   27-Jan-2020   09:09 AM (IST)

Gold prices climbed to a more than two-week high on Monday as rising concerns over the spread of a virus outbreak in China and its potential economic impact prompted investors to buy the safe-haven metal. Spot gold rose to its highest since Jan. 8 at $1,586.42 and was up 0.6% at $1,579.94 per ounce by 0131 GMT. U.S. gold futures advanced 0.5% to $1,579.50. The new coronavirus in China has killed 80 and infected more than 2,000, as residents of Hubei province, where the disease originated, were banned from entering Hong Kong amid global efforts to halt the rapid spread of the outbreak. Asian stocks slipped as investors remained wary of the virus outbreak in China, while the yen jumped. The coronavirus transmission ability is getting stronger and infections could continue to rise, China’s National Health Commission said on Sunday, and the country might extend Lunar New Year holidays due to the virus outbreak. Investors are also keeping a close eye on the U.S. Federal Reserve’s first  meeting of the year scheduled on Jan. 28-29. Canada’s Barrick Gold Corp signed a deal with Tanzania on Friday in which the government will take stakes in three gold mines, ending a long-running tax dispute. Armenia’s prime minister called for environmental protesters to end their 18-month-old blockade of a foreign-owned gold mine on Saturday, saying the protest was not in the national interest. Physical gold demand was subdued in major Asian hubs last week on account of the Lunar New Year holidays, with growing fears the virus outbreak in China could further dampen activity. Hedge funds and money managers cut their bullish positions in COMEX gold contracts in the week to Jan. 21, data showed on Friday.  Palladium dipped 1.7% to $2,385.85 an ounce. Silver jumped 0.9% to $18.24, while platinum fell 0.4% to $997.25.