Companies & Markets

Gold declines as virus panic spurs sell off across markets

Published Tue, Mar 17, 2020 · 03:06 AM

[SINGAPORE] Gold declined as investors rush to raise cash to cover losses in other markets amid a rout in US stocks, with global leaders striking a pessimistic tone over the likely economic impact of the coronavirus outbreak.

Wall Street stocks plunged the most since 1987 on Monday after President Donald Trump warned the economic disruption from the virus could last into summer. While US futures had modest gains early in Asia, contracts pointed to losses in Tokyo and Hong Kong.

A wave of global central bank stimulus and a pledge from the leaders of the Group of Seven to do whatever is necessary to ensure a globally coordinated response has failed to quell investor concerns about the economic hit from the coronavirus.

Precious metals have been caught up in the wave of heavy selling across markets, Australia & New Zealand Banking Group Ltd. senior commodity strategist Daniel Hynes said in a note. "US equity markets suffered another sharp correction, which saw investors lose confidence in the ability of government and central banks to combat the economic effects of the spread of the coronavirus."

Spot gold dropped as much as 1.1 per cent to US$1,497.49 an ounce and was at US$1,505.54 by 8:13 a.m. in Singapore. Prices are down 12 per cent from a seven-year high reached a week ago and tumbled the most since 1983 last week.

Silver rose 1.4 per cent after a 12 per cent loss Monday. Palladium gained 3 per cent after plunging 12 per cent on Monday, while platinum advanced 1.1 per cent.