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PRECIOUS-Gold slides from 7-year high, coronavirus concerns persist

Commodities Feb 25, 2020 16:11
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© Reuters. PRECIOUS-Gold slides from 7-year high, coronavirus concerns persist
 
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(Updates prices)
* Gold priced in euros, pound slides from record highs
* Global stock markets stabilize
* Coronavirus interactive graphic: https://tmsnrt.rs/2GVwIyw


By Harshith Aranya
Feb 25 (Reuters) - Gold prices dipped on Tuesday as
investors booked profits after the metal soared to a seven-year
high in the previous session against the backdrop of a rise in
coronavirus cases outside China.
Spot gold XAU= had slipped 0.5% to $1,652.35 per ounce by
1450 GMT, having shed more than 1% at one point earlier in the
session. U.S. gold futures GCcv1 fell 1.3% to $1,655.30.
On Monday, the metal surged as much as 2.8% to $1,688.66,
its highest since January 2013.
"Since then the market has basically run into some
profit-taking despite the biggest sell-off in the global stocks
for quite a while and it just highlights the market may have run
ahead of itself," said Saxo Bank analyst Ole Hansen.
Global stock markets stabilised on Tuesday after European
shares had their worst one-day loss since June 2016 in the last
session. MKTS/GLOB
Countries around the world are stepping up efforts to stop a
pandemic of the virus that emerged in China and is now spreading
in Europe and the Middle East. Mainland China in total had 508 new confirmed cases, up from
409 on Feb. 23, bringing the total number of confirmed cases so
far to 77,658. Gold in euros XAUEUR=R and gold priced in sterling
XAUGBP=R slid from all-time peaks hit on Monday.
"With the virus spreading to other regions, and if China
experiences a relapse and the drags on growth extend into April,
(spot) gold could move to $1,650–1,700 per ounce," UBS analysts
wrote in a note.
The rapid spread of the virus beyond China has heightened
fears over its impact on the global economy, driving some bets
that the U.S. Federal Reserve will be pressed to cut rates to
cushion the hit. "The market is most certainly already in the process of
pricing in additional rate cuts in the U.S. where the
speculation about the March cut has started to attract some
attention," Saxo Bank's Hansen said.
However, "the dollar could strengthen even further which
slows gold's approach, but major central banks are most
certainly trying to do what they can to support the economies."
USD/
On the technical front, gold may retest a support at $1,639
per ounce, according to Reuters analyst Wang Tao.
Among other precious metals, palladium XPD= jumped 1.9% to
$2,677 per ounce.
Silver XAG= fell 1.3% to $18.37 an ounce, having touched
its highest since early September on Monday, while platinum
XPT= slid 1.1% to $952.42.

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Gold technicals https://tmsnrt.rs/2SWt2Dy
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PRECIOUS-Gold slides from 7-year high, coronavirus concerns persist
 

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