Gold holds firm as new coronavirus numbers are assessed

Bengaluru — Gold prices held steady on Friday after easing from a more than one-week high as investors assessed the risks to the global economy from the coronavirus epidemic.

Spot gold was unchanged at $1,575.69 an ounce at 10.36am GMT, having earlier touched its highest since February 4 at $1,577.89. For the week, bullion has so far gained about 0.3%. US gold futures were flat at $1,578.90.

On Thursday, Chinese authorities reported 121 new deaths and 5,000 new coronavirus cases in mainland China with economists scaling back growth expectations for the world’s second-largest economy as they assess the impact of the outbreak.

“The economic impact of the measures taken [by China] should not be underestimated; the workers are returning very slowly to their factories, supply chains are probably disrupted … we see quite a drag on the Chinese growth in the first-quarter,” said Julius Bär analyst Carsten Menke.

However, European shares touched record highs as investors shrugged off fears about the outbreak’s global economic impact and the dollar hit a more-than four-month peak against a basket of rivals, limiting gold’s advance.

Gold in euros eased slightly from a record peak of €1,456.07/oz hit earlier in the session.

Meanwhile, US prosecutors on Thursday accused Chinese company Huawei of stealing trade secrets. Washington had placed the telecoms equipment maker on a trade blacklist last year.

“All the geopolitical concerns that took gold prices higher are still with us … even the US-China phase-one deal is being affected by the virus to some extent. We have still got potential tensions in the Middle East and the US elections are coming up,” INTL FCStone analyst Rhona O’Connell said.

“Gold prices are stuck in a range of $1,550- $1,580 an ounce and at the moment I see nothing that will take it out of there.”

Among other precious metals, palladium rose 0.7% to $2,440.31 an ounce, and was on track to register its best week since the week ended January 17, gaining more than 5%.

Silver gained 0.3% to $17.68, while platinum was up 0.5% at $972.16, and set to gain for a second straight week.

Reuters