There's nothing like a financial contagion to get consumers of gold to stockpile up in safe haven. The yellow metal reached Friday's two-week peak, moving toward the $1,580-per-ounce mark sought by gold bugs on worldwide concerns about the China-originated coronavirus ' economic impact.
Gold futures settled at $6.50 or 0.4 percent for February delivery on New York's COMEX, at $1,565.90 per ounce. Later it hit $1,575.25, a record since Jan. 8, when gold bugs seemed looking for a $1,580 resistance check.
Spot gold, which tracks live trades in bullion, was up $8.66, or 0.6%, at $1,571.69 per ounce, after a two-week high at $1,575.83.
Gold had initially been slow to react to potential economic fallout from coronavirus, but caught up over the past two days.
"Retrospectively, yesterday afternoon, it seemed that the virus situation prodded bulls back to long positions," the Hightower Report said in its report on precious metals, adding that if the scenario prevailed, gold bugs might predict an "upside extension from classic short cover (stop loss) purchase."
Like the Chinese-born SARS health outbreak that caused major business failures in 2003, so far 26 people have been killed by the coronavirus, including in China. In the middle of the country's most important holiday season, the Lunar New Year, it has forced the Chinese authorities to impose travel restrictions across 10 cities affecting up to 40 million people according to some estimates. Even the Disneyland of Shanghai, one of the most popular tourist destinations in the country, was shut down.
Fears of a global coronavirus outbreak have pummeled financial markets around the world, with Wall Street's S&P500 Index down nearly 1 percent on Friday, headed for its biggest drop since October, as investors unloaded risk everywhere and poured into US defense. Treasuries and other reserves assuring defense.
Meanwhile the United States confirmed a second case of coronavirus on Friday, stating that after traveling back from Wuhan, a woman from Illinois was discovered to be sick. A guy from the state of Washington became the first U.S. citizen to contract the virus earlier this week.
The rise in Gold was also notable as it came on the heels of a dollar surge that reached a basket of six major currencies at three-week highs.
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