Metals Stocks: Gold drifts lower as haven demand wanes
Gold futures edged lower Wednesday, with demand for havens continuing to ebb on signs the spread of COVID-19 in China may be slowing.
Gold for April delivery
on Comex was off $2.20, or 0.1%, at $1,567.90 an ounce. March silver
meanwhile, shed 11.2 cents, or 0.6%, at $17.485 an ounce.
“Gold has lost some momentum since peaking earlier in the year, but the trend remains positive,” Tyler Richey, co-editor at Sevens Report Research, wrote in a newsletter. “Gold remains our preferred destination for any risk capital going into commodities.”
On Wednesday, global equities climbed, with benchmark U.S. stock indexes moving higher. The S&P 500
and Dow Jones Industrial Average
touched intraday records, signaling a return of appetite for riskier assets.
China’s National Health Commission on Wednesday said 2,015 new cases of the disease caused by a new strain of coronavirus that emerged in Wuhan, China, in late 2019, had been reported over the last 24 hours, declining for a second day. That brought the number of cases in mainland China to 44,653, although experts have warned that a substantial number of infections may have gone uncounted. The commission said there were 97 additional deaths from the virus in the last 24 hours, bringing the mainland total to 1,113.
Analysts said a hit to physical demand in China was also serving to keep a lid on the yellow metal.
In China, “the virus is having a noticeable impact on physical gold demand. There, as well as in Hong Kong, many jewelers are shut because gold buyers are staying at home to avoid infection and are reducing their spending to the bare essentials,” said Daniel Briesemann, analyst at Commerzbank, in a note.
Prices for gold settled lower on Tuesday, after posting four consecutive sessions of gains.
Going forward, however, “with more political headlines, Middle East worries, 4urozone economic problems [and] Brexit, investors may be bargain hunting in gold soon if we see some lower prices,” said George Gero, managing director at RBC Wealth Management.
In other metals trade, April platinum
fell 1.2% to $961.60 an ounce, while March palladium
was off 0.1% at 2,263 an ounce.
rose nearly 0.8% to $2.6025 a pound.