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PRECIOUS-Gold surges to 7-year peak as pandemic fears spark safe-haven rush

Published 24/02/2020, 20:21
© Reuters.  PRECIOUS-Gold surges to 7-year peak as pandemic fears spark safe-haven rush
XAU/USD
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US10YT=X
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(Updates prices)
* The markets are spooked right now -analyst
* U.S. 10-yr Treasury yield falls to lowest level since July
2016
* Coronavirus interactive graphic: https://tmsnrt.rs/2GVwIyw
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl

By Harshith Aranya
Feb 24 (Reuters) - Gold soared as much as 2.8% on Monday to
its highest level in seven years, as investors worried about
global economic growth in the face of sharply rising coronavirus
cases outside China.
Spot gold XAU= was up 1.7% at $1,671.35 per ounce by 1:59
p.m. EST (1859 GMT). The session high of $1,688.66 was the
highest level since January 2013.
U.S. gold futures GCv1 settled 1.7% higher at $1,676.60 an
ounce.
"The markets are spooked right now," said Bob Haberkorn,
senior market strategist at RJO Futures, citing coronavirus
fears.
"The concern is not about the virus precisely, it is from
the economic standpoint. The Dow Jones is down about 1,000
points, the bond yields are also lower."
There was a sharp rise in coronavirus cases reported in
Italy, South Korea and Iran, with Afghanistan and Iraq reporting
their first cases. However, the rate of infection in China has
eased.
Outside mainland China, the outbreak has spread to about 29
countries and territories, with a death toll of about two dozen,
according to a Reuters tally. The World Health Organization said it was worried about the
growing number of cases without any clear link to China.
Investors view gold and other assets like government bonds
and the U.S. dollar as safe havens during times of stress.
USD/
The curve inversion between the 3-month and 10-year U.S.
Treasury bond yields deepened, in what economists view as a
recession signal. The benchmark 10-year Treasury yield
US10YT=RR fell to its lowest level since July 2016. US/
Investors' fears over the virus outbreak triggered a wide
sell-off in equity markets. The Dow Jones industrials .DJI
slid more than 800 points, below its 100-day moving average for
the first time since October. .N
In Europe, markets had their biggest daily declines since
mid-2016. MKTS/GLOB


"The upswing in the gold price is being accompanied by
further ETF inflows. Speculative financial investors have also
increased their bets on rising gold prices significantly,"
Commerzbank analysts said in a note.
"However, this also means that the gold price upsurge is on
shaky ground, so falls can be expected in the event of
profit-taking."
Reflecting increased investor interest in bullion,
speculators raised their bullish positions on COMEX gold and
silver contracts in the week to Feb. 18, data showed on Friday.
CFTC/
Mirroring gold's gains, silver XAG= jumped 2.3% to $18.88
an ounce, having hit its highest level since September at
$18.90.
Palladium XPD= shed 3.1% to $2,619.01 per ounce, while
platinum XPT= fell 0.3% to $970.17.

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Graphic-Coronavirus fears spark flight to safety https://tmsnrt.rs/2vZVMSR
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