Spot gold climbed above $1,560 an ounce, the yen rose 0.5 percent against the dollar and the offshore and onshore renminbi both fell more than 300 points against the dollar on Thursday as fears of a pneumonia outbreak caused by a new coronavirus boosted risk aversion in financial markets. According to the People’s Daily, by 23:00 on January 23, 639 cases of the new coronavirus pneumonia had been confirmed, including 444 cases in Hubei province and closed cities in Wuhan. In addition, the European central bank interest rate decision is also the focus of the market. The European central bank left interest rates unchanged and launched its first strategic review in nearly two decades. Lagarde pointed to December as a possible time to announce the ECB’s strategy and said the bank’s monetary policy decisions would be independent of the strategic review. The euro fell more than 70 points against the dollar after the rate decision, hitting a new low of 1.1035 since December 2.
Wuhan pneumonia confirmed about 650 people gold rose slightly
The new coronavirus first diagnosed less than a month ago, has killed at least 17 people in China and infected about 650 people around the world, including the first cases in Singapore and Saudi Arabia, according to local and international media reports. Medical teams have been sent to affected cities, and hospitals are asking for donations of basic supplies, including masks, goggles, protective clothing, and disinfectant.
According to People’s Daily, citing huangshi daily, on the evening of January 23, the reporter learned from huangshi city’s pneumonia epidemic prevention and control headquarters of the new coronavirus infection, as of 21:00 on January 23, a total of 1,917 patients with fever had been admitted to the city’s fever clinics.
According to the People’s Daily, as of 23:00 on January 23, 639 cases of the new coronavirus pneumonia had been confirmed: 444 in Hubei. In addition to the city of Wuhan, huanggang, Ezhou, chibi, Xinjiang, xiantao, etc.
To prevent and control the outbreak of the new coronavirus pneumonia, the civil aviation administration of China (CAAC) requires that, starting from 0:00 on January 24, 2020, airlines and their ticket sales agencies should refund tickets free of charge if passengers who have already purchased civil aviation tickets voluntarily return tickets.
Gold steadied on Thursday amid market jitters over a new coronavirus outbreak in China, though gold remained in a tight range as investors waited for further stimulus.
Spot gold rose slightly during the session and is now trading around $1,563.78 an ounce, having touched a session high of $1,566.99.
Bob Haberkorn, the senior market strategist at RJO Futures, said: “equities have weakened a bit and that has sparked some interest in gold. But the absence of any geopolitical risk in the short term is keeping gold prices in check. The ECB meeting didn’t do much.”
U.S. stocks opened lower on Thursday as fears of a coronavirus outbreak in China intensified, while mixed corporate earnings added to the gloom.
Traders remain concerned about the spread of the virus because a higher death toll could damage the economy of one of the world’s largest economies, as it did in a 2002-03 outbreak.
However, OANDA analyst Jeffrey Halley said concerns about the virus appeared to have been ignored by the gold market.
“If regional investors were really concerned about the coronavirus, we might expect gold prices to move higher today rather than lower,” he said in a note.
Gold is seen as a safe store of value in times of political and economic uncertainty. The price of gold rose above $1,610 an ounce on January 8 as the us-Iran conflict intensified at the start of the year. Since then, gold has remained above $1,550.
Analysts said continued geopolitical uncertainty and a generally low-interest-rate environment would continue to support gold in the longer term.
Elsewhere, the yen strengthened and the renminbi fell to a two-week low as investors grew concerned about the spread of new pneumonia in Wuhan.
Analysts have pointed to limited gains in the yen and declines in the yuan as signs that investors are not yet panicking about the virus.
The dollar extended losses against the yen to 0.5 percent, hitting a fresh low of 109.26 since January 9.
The dollar/offshore yuan touched as high as 6.9420, more than 360 points above the session low of 6.9057. The dollar/onshore yuan traded as high as 6.9429, up nearly 340 points from a session low of 6.9090. Since hitting a six-month high on Monday, the renminbi has lost more than 1 percent of its value. The onshore renminbi is heading for its worst week since August.
Hao Zhou, an economist at Commerzbank, said there were concerns that the virus could hurt domestic demand in China.
“In response to this risk, monetary policy may show a tendency to ease policy further. For the foreign exchange market, the risk aversion model may dominate for the time being, “Zhou said.
The euro fell more than 70 points as the European central bank launched its first strategic review in nearly two decades
The euro fell Thursday after the European central bank left interest rates unchanged and launched its first strategic review in nearly two decades.
The euro extended losses against the dollar to 0.5 percent, falling more than 70 points in the short term to $1.1035, its lowest level since December 2. The dollar index.dxy rose about 0.3 percent to hit a high of 97.81.
The ECB launched the review to determine whether its inflation target was appropriate. It also left its deposit rate at a record low of minus 0.5 percent.
ECB President Christine Lagarde told a news conference that interest rates would “remain at current levels or lower until we see a strong convergence in the inflation outlook to a level close enough to but below 2 percent, which has been reflected in underlying inflation dynamics.”
Assessment of monetary policy: ms Lagarde said the bank would assess how to measure inflation and how to communicate it. Want to hear what the market, experts and academics expect from a strategic review.
The ECB’s listening will be different from that of the fed, whose strategic review of monetary policy will end when it should. The review is expected to last a year. The new strategy is expected to be agreed in November and December.
Lagarde cited December as a possible time to announce the ECB’s strategy, noting that the ECB’s monetary policy decisions would be independent of the strategic review.
However, ms Lagarde said there was no discussion of changing the tiered interest rate system.
On inflation: ms Lagarde noted that incoming economic data were in line with the bank’s baseline forecasts, with the economy weighed down by weakness in manufacturing, services, and construction remaining resilient, and investment growth weighed down by weak trade and global uncertainty.
The inflation outlook remains subdued and the highly accommodative monetary policy stance will remain in place for some time. Some trade uncertainties are easing. Measures of inflation expectations are stabilizing.
The ECB is committed to inflation symmetry and is ready to adjust all its tools if needed.
On trade risks: ms Lagarde said trade was an important factor in assessing downside risks. The economic and trade agreement between China and the United States in the first phase alleviates the uncertainty to some extent.
Welcome, trump’s meeting with European Commission President Stephane von der leyen. We will continue to monitor the trade situation closely and expect the United States and the European Union to continue to cooperate on trade.