Gold creeps up as US Fed flags virus effect on China

Bengaluru — Gold prices inched up on Thursday after the US Federal Reserve said the new coronavirus outbreak could hurt China’s economy in the short term.

Spot gold rose 0.1% to $1,578.05/oz by 0.58am GMT, having gained 0.7% in the previous session. US gold futures climbed 0.5% to $1,577.70.

The Fed held rates steady on Wednesday, with its chair Jerome Powell pointing to continued moderate economic growth and a “strong” job market, and giving no sign of any imminent changes in borrowing costs.

Powell said the new coronavirus outbreak is “a significant thing which will have some effects on the Chinese economy, at least in the short term”.

Foreign governments began flying their citizens out of China’s Hubei province, as authorities said the death toll there had reached 170.

The World Health Organisation said it would reconvene on Thursday to decide whether the new virus from China constitutes a global emergency.

President Donald Trump on Wednesday signed a new North American trade agreement during an outdoor ceremony at the White House attended by about 400 guests.

The US goods trade deficit rose sharply in December as imports rebounded and businesses became more cautious on accumulating inventory.

Global demand for gold fell in the last three months of 2019 as sales of gold jewellery, bars and coins declined alongside purchases by central banks and financial investors, according to an industry report said.

Australia’s Newcrest Mining posted a 16% fall in second-quarter gold output due to shutdowns at its Lihir mine.

Russia’s Norilsk Nickel (Nornickel) said on Wednesday its Global Palladium Fund would deliver three tons of palladium ingots to the market from its current stock to provide a short-term relief to tight supplies.

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.45% to 903.50 tons on Wednesday.

Palladium rose 0.7% to $2,305.21/oz, silver gained 0.3% to $17.58, while platinum climbed 0.2% to $975.70.

Reuters