Gold gains amid coronavirus’ continuous threat

Kenneth Afor

Gold investors recorded slight profits on Tuesday after nearly four-week high at the end of trading, bearing in mind a possible negative impact on China’s economy of the coronavirus which has claimed 427 lives in the Asian country.

The United States Spot gold fell by 0.2 percent at $1,572.87 per ounce early Tuesday, after recording $1,591.46 in the last trading session, its highest since January 8 while the US gold futures fell by 0.3 percent at $1,577.20.

Ajay Kedia, a market analyst has argued that one of the major reasons why gold prices remained down is that investors are selling off their assets to generate profits for themselves said in the market.

Kedia, however, added that prices of the yellow metal will continue as a result of the positive signs the global equities markets are currently having.

“Profit-booking is the main reason for gold to be down. Secondly, global equities started moving on the positive side, the gold market is due for a correction and this can drag prices to the $1,545 to $1,550 level again,” Kedia said.

Also, the United States dollar appreciated against a number of major currencies gaining 0.4 percent in the previous session, Tuesday.

The coronavirus outbreak according to Warren Patterson, an analyst at ING which drove fears on investors’ mind helped to salvage prices of the precious metal these past few days in which aggressive buying of the bullion was largely recorded.

“It is the uncertainty around coronavirus that continues to be supportive of gold prices. Still, we see a general shift to safe-haven assets, reflected in ETF holdings with sizeable inflows that demonstrate the uncertainty in the market,” Patterson said.

Among other precious metals, palladium surged by 2.4 percent to $2,375.97 an ounce, silver rose by 0.6 percent to $17.75, and platinum edged 0.8 percent to $974.32 per ounce, Tuesday.