You are here: Home » International » News » Markets
Business Standard

Gold gains on coronavirus risks, but rise in equity market caps gains

The dollar recovered following recent declines, finding support from robust jobs data from the United States on Wednesday

Topics
Gold Prices | Coronavirus

Reuters 

Gold gains on coronavirus risks, but rise in equity market caps gains

Gold edged up on Thursday on safe-haven buying fuelled by worries about the fast-spreading coronavirus, but a rise in equity limited bullion's gains.

Spot gold inched 0.2 per cent higher to $1,638.70 per ounce by 0451 GMT. US gold futures were down 0.2 per cent at $1,639.50.

"When we see support for both gold and the dollar, it's an indication of safe-haven desire from investors," said Michael McCarthy, chief market strategist at CMC

The dollar recovered following recent declines, finding support from robust jobs data from the United States on Wednesday.

The US Federal Reserve's surprise interest rate cut on Tuesday to shield the world's largest economy from the economic impact of the epidemic also supported non-yielding bullion.

Asian shares rose on Thursday, tracking overnight gains on Wall Street following strong performance of former US Vice President Joe Biden in the Democratic nomination campaign.

"If this (equity) rally continues for three-four days, could take that as an all-clear in terms of economic impact of the virus and we might see pressure on gold. It's a very volatile situation," McCarthy said.

The Monetary Fund said on Wednesday the global spread has crushed hopes for stronger growth this year, while a Fed report showed there are signs the epidemic has begun to weigh on business sentiment in the United States as well.

Investors are now waiting to see whether the European Central Bank would also announce new stimulus, with euro zone markets pricing in a 90 per cent chance of deposit rate reduction next week.

In other metals, palladium slipped 1.9 per cent to $2,527.21 per ounce.

"The auto sector supply chain will be impacted by COVID-19. Although, this demand shock is expected to have limited impact on palladium due to structural deficit backdrop, we see room for further setbacks following the recent rally," ANZ Bank analysts said in a note.

The autocatalyst metal slumped as much as 13 per cent on Feb. 28, following a record run to an all-time high of $2,875.50 on Feb. 27 due to a stark supply shortfall.

Silver inched up 0.1 per cent to $17.20 per ounce, while platinum shed 0.2 per cent to $871.10.

 

First Published: Thu, March 05 2020. 12:44 IST
RECOMMENDED FOR YOU