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Gold prices little changed as strong equities counter coronavirus fears

There are signs the epidemic has begun to weigh on business sentiment in the United States

Reuters 

gold diamond
US services sector activity jumped to a one-year high in February

were little changed on Thursday as stronger equities and upbeat US data countered fears that the fast-spreading coronavirus outbreak would slow the global economy.

Fundamentals

Spot gold was up 0.1 per cent at $1,637.80 per ounce by 0059 GMT.

US gold futures were down 0.2 per cent to $1,693.10.

Asian shares were looking to rally for a fourth straight session as US swung sharply higher and another dose of central bank stimulus offered some salve for the global economic outlook.

US services sector activity jumped to a one-year high in February, data showed, suggesting strength in the economy before a recent escalation of recession fears ignited by the epidemic that prompted an emergency interest rate cut.

There are signs the epidemic has begun to weigh on business sentiment in the United States, a report by the Federal Reserve showed, even as the economy expanded at a modest to moderate pace over the past several weeks.

The global spread of the virus has crushed hopes for stronger growth this year and will hold 2020 global output gains to their slowest pace since the 2008-2009 financial crisis, the International Monetary Fund's managing director said.

The US House of Representatives overwhelmingly approved an $8.3 billion funding bill to combat the spread of the virus on Wednesday, sending the emergency legislation to the Senate.

The Bank of England should wait until it has more clarity about the economic hit from the epidemic before making any decision to cut interest rates, its next governor Andrew Bailey said.

Euro zone businesses largely withstood the impact of the virus in February, growing at their fastest pace in six months, though a survey on Wednesday painted a gloomier outlook, with falling export demand and disruptions to supply chains.

Mainland China had 139 new confirmed cases of coronavirus infections on Wednesday, the country's National Health Commission said on Thursday, taking the country's total number of confirmed cases so far to 80,409.

Palladium slipped 0.2 per cent to $2,572.87 per ounce, while platinum was steady at $872.40.

Silver rose 0.3 per cent to $17.22 per ounce.

 

 

First Published: Thu, March 05 2020. 07:39 IST
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