The latest news on the outbreak of the new coronavirus (nova virus) came on the morning of Monday (February 3) in the Asian market. Gold remained firm as the market remained in risk aversion amid the outbreak, with spot bullion jumping above $1, 590 an ounce after opening. In addition, brent crude fell as much as 2 percent in early trading on fears the outbreak would affect demand for oil.
Gold briefly topped 1590 in early trading
Spot gold jumped as high as $1,593.30 an ounce in early trading as the pneumonia outbreak spurred risk aversion.
“I think we’re going to see continued concern about the coronavirus,” said Phil Flynn, senior market analyst at Price Futures Group in New York.
“I think there’s definitely demand right now because [the number of infections and deaths] is increasing every day,” said Kevin Grady, President of Phoenix Futures and Options LLC.
“I think coronavirus risk will continue to be central for some time,” said Colin Cieszynski, chief market strategist at SIA Wealth Management in New York. Gold remains supported above $1,500 an ounce.”
John Weyer, co-head of commercial hedging at Walsh Trading, said gold would be supported by the new coronavirus outbreak.
“It’s still a cloud hanging over the market,” Weyer said. “whenever fear hits [stocks] hard, it’s a good reason for gold to go up.”
Richard Baker, the editor of Eureka Miner’s Report, said Comex gold could break through $1,600 an ounce in the coming weeks.
“It’s all about the Wuhan coronavirus — gold went up, everything else went down,” Baker said. The declared global health emergency has had a chilling effect on financial markets, with gold gaining against equities, key commodities, and major currencies.”
George Gero, managing director at the royal bank of Canada wealth management, said he expected gold prices to rise not only because of the outbreak but also because of economic news that could worry financial investors.
Jasper Lawler, head of research at London Capital Group, said: “I am happy with the state of the gold market and I think prices will continue to rise.”
Afshin Nabavi, head of trading at MKS, said a break above $1,600 would take gold to a high of $1,611 hit earlier in January when Iran launched a missile.
Kitco News’ weekly gold survey, released on Friday, showed respondents were still bullish on gold prices this week. Traders and analysts said they were still concerned about the economic impact of the coronavirus in China, with a small number of cases spreading to other countries.
Seventeen market professionals took part in the survey of Wall Street. Fourteen professionals, or 82%, expect gold prices to rise. Only three professionals, or 18 percent, expect gold prices to fall and none expect the market to move sideways.
Meanwhile, in an online poll of ordinary investors, 995 people voted. A total of 687 ordinary investors, or 69%, expect gold prices to rise this week. Another 163, or 16 percent, thought gold prices would fall, with the remaining 145, or 15 percent, neutral.
Gold rose 4.73 percent in January, its biggest gain since August.