The price of gold today increased by more than two percent and reached its highest pricing since February 2013. The yellow metal was supported by investors’ shift to safe-haven assets after an increase in coronavirus infection in three countries outside China heightened fears over the impact of the outbreak on the global economy.
U.S. gold futures went up by 1% to $1,664.60 an ounce. Spot prices climbed to $1,678.59 an ounce earlier in the trading session before settling at $1,661.86 as of 0304 GMT.
Italy, Iran and South Korea reported a sharp increase in coronavirus virus infection. The two first two cases in Iran was reported last Wednesday. Today, it already had 43 confirmed cases and eight deaths. In Italy, the third patient has already died and the number of confirmed infections rose to 157. In South Korea, 169 new cases were reported on Sunday and 161 today, bringing the total to 763. The death toll is seven. This forced the South Korean government to raise the infectious disease alert to the highest level.
The World Health Organization (WHO) has expressed concerns because the growing number of infections does not have a clear link to the outbreak in China. The spread of new infections outside China has extended the losses of the global equities market and sent the U.S. 10-year Treasury yield close to its five-month low. It also pushed the Japanese yen further away from its 10-month low. On the other hand, the U.S. dollar gained because it is also considered a safe-haven asset.
According to CMC chief market strategist Michael McCarthy, most investors are selling their shares and putting their money in safe-haven assets. He expects lower interest rates to remain longer because of the global economic impact of the outbreak. McCarthy added that the bullion is also supported by an increase in technical buying, particularly after the bullion went passed $1,611 an ounce.
Meanwhile, The U.S. Commodity Futures Trading Commission has reported that speculators have lifted their bullish positions on COMEX gold for the week which ended on February 18, 2020.