Gold Set For Best Month In Five as Virus Stifles Risk Appetite
Gold prices rose on Friday (Jan 31st) and were heading for their best month in five as worries over economic growth due to the fast-spreading coronavirus boosted appetite for safe havens.
Supply-squeezed palladium, meanwhile, was on track for its biggest monthly percentage gain since November 2016.
Spot gold was up 0.8% at $1,585.66 per ounce by 01:55 p.m. EST (1855 GMT). The metal has gained more than 4% so far this month.
U.S. gold futures settled 0.1% lower at $1,587.90.
“Coronavirus continues to be a strong factor of support as we are seeing global growth concerns hurting other markets across the board. As a result, we’re seeing safe-haven demand drive into gold,” said David Meger, director of metals trading at High Ridge Futures.
“Gold is the quintessential safe-haven asset that money managers are viewing as an alternative for cash.”
The World Health Organization declared the epidemic a global emergency after the virus killed more than 200 people.
“At this point, it’s not something the Chinese economy can shrug off. There will be a hit to growth, the magnitude of which will be difficult to chisel out in detail for quite a while,” said Ilya Spivak, a senior currency strategist at DailyFx.
The virus fears gripped financial markets, overshadowing the latest batch of upbeat corporate earnings.