Metals Stocks: Gold extends gains to highest level since 2013
Gold futures climbed Thursday morning, putting bullion on track to register a sixth straight gain as persistent worries about China’s coronavirus and a benign interest-rate environment provide the precious metal a runway higher.
Gold has climbed in tandem with the U.S. dollar, something that doesn’t usually occur as a stronger greenback can weaken the appeal for dollar-pegged safe haven assets like gold.
“Gold rise and US dollar index rising simultaneously is symbolic of safe haven demand. I had mentioned last week that global spread of coronavirus is the key. Coronavirus is infecting more and more people worldwide,” wrote Chintan Karnani, analysts at Insignia Consultants, in a Thursday research report.
Gold for April delivery
on Comex rose $7.60, or 0.5%, to $1,619.40, after a similar rise on Wednesday. Prices for the most-active contract marked the highest are moving toward its highest levels since February 2013, according to FactSet data.
Although the rate of new cases of COVID-19, the infectious disease that reportedly originated in Wuhan, China, has gone down, investors have been keying in on the spread of coronavirus in other parts of the globe.
South Korea’s Yonhap News Agency said COVID-19 has claimed its first life. The mayor of the South Korean city of Daegu urged its 2.5 million people to refrain from going outside, according to the Associated Press. Meanwhile, Japan said a pair of elderly passengers died, who had been quarantined on a ship, died due to the deadly contagion.
Analysts at Goldman Sachs estimate that the virus could eventually produce a correction to stock markets that have been trading as if the outbreak is contained.
traded flat at $18.315 an ounce, after climbing 0.9% in the previous session, holding at its highest level since January of this year.
Gains for metals come as fears about stress to the global economy from the virus has pushed the 10-year Treasury note yield
to 1.54%, while the ICE Dollar Index
a gauge of the buck against a basket of a half-dozen currencies, gained 0.1% to 99.80.
Precious metals pulled back slightly after U.S. economic data early Thursday. Initial jobless claims edged up by 4,000 to 210,000 in the seven days ended Feb. 15, the government said Thursday. The figures are seasonally adjusted. Economists polled by MarketWatch had forecast a 210,000 reading. A reading on manufacturing, meanwhile, the Philadelphia Fed Business Outlook Survey, produced a reading that was its highest in three years, outstripping analysts’ estimates.