Reuters: Gold Jumps Over 2% as Virus Spread Spurs Safe-haven Demand

February 24, 2020

Article by K. Sathya Narayanan in Reuters News

Gold prices climbed more than 2% on Monday to their highest since February 2013, as spikes in coronavirus cases in several countries outside China deepened worries about a hit to the global economic growth, prompting a flight to safe havens.

Spot gold was up 1.6% at $1,669.80 per ounce, after climbing to $1,678.58 earlier in the session. U.S. gold futures rose 1.5% to $1,672.80.

“The thinking is that fewer people are holding shares, selling down in particular, and that money has to fall into havens,” said Michael McCarthy, chief market strategist at CMC Market.

“The impact on the global economy also means we will likely see a lower interest rate environment for longer.”

The World Health Organization said it is worried about the growing number of cases without any clear link to China.

“Gold has finally established some serious momentum, and more negative coronavirus headlines will see a test of $1,700 an ounce on (safe-)haven flows, sooner rather than later,” Jeffrey Halley, senior market analyst at OANDA, said in a note.

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