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Gold gains but set for weekly drop amid flight for cash

Friday,   20-Mar-2020   09:25 AM (IST)

Gold prices rose on Friday after a fall in the previous session, but the metal was on track to post its second weekly drop due to a rush for cash amid the widening economic fallout from the coronavirus outbreak.Spot gold rose 0.4% to $1,475.43 per ounce by 0029 GMT. It was down more than 3% for the week. The metals fell more than 1% on Thursday as the dollar jumped to multi-year highs and investors continued to sell assets to hoard cash. U.S. gold futures fell 0.3% to $1,474.20 per ounce. MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.6%, while Australia’s beleaguered market rose 2.9%. The U.S. Federal Reserve opened the taps for central banks in nine new countries to access dollars in hopes of preventing the coronavirus epidemic from causing a global economic rout. The United States warned Americans on Thursday to return home or stay abroad indefinitely, while Senate Republicans unveiled a $1 trillion economic stimulus plan to provide funds directly to businesses and the American public, as the number of virus cases in the country surged past 13,000. The Bank of England promised 200 billion pounds of bond purchases and cut its key interest rate to 0.1% in a second emergency move in just over a week to try to mitigate the hit to Britain’s economy from the outbreak. The global economy is already in a recession as the hit to economic activity from the virus has become more widespread, according to economists polled by Reuters amid a raft of central bank stimulus actions this week. The number of Americans filing for unemployment benefits surged by the most since 2012 to a 2-1/2-year high last week, as companies in the services sectors laid off workers because of the epidemic. The outbreak caused the steepest drop in German manufacturers’ expectations in the 70-year history of surveys, data showed. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.16% to 922.23 tonnes on Thursday. Palladium fell 0.5% to $1,644.04 per ounce. Platinum rose 1.6% to $595.69 but was set to post its biggest ever weekly fall.  Silver gained 0.4% to $12.16, but was on track to post its biggest weekly decline since September 2011.