On Friday, precious metals markets closed with a significant increase in gold quotes amid news of the spread of coronavirus, but the day before, the World Health Organization said that it was too early to introduce an international emergency.
COMEX February gold futures were up $ 6.50, or 0.4% at $ 1,571.90 an ounce, while March silver futures rose 28.4 cents, or 1.6%, to $ 18.113 per ounce. oz.
Gold hit more than a 2-week close on Thursday as the spread of the coronavirus triggered selling in global equity markets and boosted demand for safe haven assets. Meanwhile, the US stock market has largely recovered after WHO said it was too early to declare an international emergency. Stock indices started the North American session on Friday with growth.
The Chinese authorities have decided to close the cities located near the epicenter of the coronavirus outbreak for entry and exit. They also canceled mass events dedicated to the celebration of the Lunar New Year, as the number of infected grows. The virus has spread to other countries.
Gold quotes will continue to react to news related to the virus, analysts said, but noted that the relationship is not straightforward.
“In our opinion, gold can move in price and does so in the context of risk appetite or fears, but it is difficult to determine the impact on prices when it comes to a virus outbreak,” said Christopher Looney, analyst at RBC Capital Markets.
"In the short term, gold tends to act as a short-term tactical hedging tool, as is the case in any crisis, amid declining risk appetite and growing fears at a time when the world is concentrating on more important issues," the expert added.
Meanwhile, April platinum futures were trading 0.8% higher at $ 1,015 an ounce, while March palladium contracts were down about 0.7%. March copper futures dropped 0.5% to $ 2.7125 a pound.
On the London Metal Exchange (LME), three-month copper contract prices, widely used as an indicator of the financial health of the global economy, fell 1.9% to $ 5,812 per tonne, their lowest since December 4, 2019. Copper posted its steepest weekly loss in five years last week, down 5.5%.
Zinc dropped 2.2% to a three-week low of $ 2,290 /t, aluminum fell 0.5% to $ 1,772.50 /t, nickel fell 0.9% to $ 12,830 /t , lead lost 0.7% to 1,927 per tonne and the cost of tin dropped by 0.9% to $ 16,700 per tonne.
