Gold eases from one-week peak

17 February, 2020 12:00 AM printer

BENGALURU: Gold eased from a more than one-week high on Friday, as hopes for global measures to soften the blow of the coronavirus outbreak increased appetite for equities. However, more new cases limited bullion losses and kept the precious metal on track for a weekly gain.

Spot gold was down 0.1 per cent at US$1,575.35 per ounce as of 0651 GMT, having touched its highest since Feb 4 at US$1,577.89 earlier in the session, report agencies.

US gold futures were flat at US$1,578.50.

“Equities market has shrugged off the bearish sentiment and has started to move higher as investors are reassessing the potential (economic) impact of the virus,” Margaret Yang, a market analyst at CMC Markets said, adding that a strong US dollar is also pressuring bullion.

Asian shares looked to post their second straight week of gains, while the US dollar rose to an over four-month high.

However, analysts said interest in gold remained intact as the death toll in China’s Hubei province rose, with nearly 5,000 new cases of infection.

Bullion has gained about 0.3 per cent so far this week.

Expectations that the virus could hurt the global economy, as well as easy monetary policy from central banks are keeping gold attractive, CMC’s Ms Yang said.

Investors are watching for US retail sales and consumer confidence numbers due later in the day.

“The US consumer is really the biggest piece of global growth at this point, with China getting a hit due to the trade war and the virus. Europe is still sluggish,” said Ilya Spivak, a senior currency strategist at DailyFx.

US prosecutors on Thursday accused Chinese company Huawei of stealing trade secrets. Washington had placed the telecommunications equipment maker on a trade blacklist last year.