Gold on track for a fourth straight gain, buoyed by coronavirus outbreak

Gold futures on Monday headed modestly higher as investors fretted about the economic impact on China of the fast-moving outbreak of the coronavirus.

Prices for the yellow metal “continue to benefit on uncertainty, with how much and how long the coronavirus will weigh on global growth,” said Edward Moya, senior market analyst at Oanda. “Expectations are growing for the virus to peak in a few weeks, but if we see any new outbreaks or continued spreading of the disease outside of China, demand for safe-havens will soar.”

Gold for April delivery GCJ20, +0.32% on Comex was up $4.20, or 0.3%, at $1,577.60 an ounce, on track for a fourth consecutive gain after bullion on Friday showed a 0.9% decline for the week based on the most-active contract, according to FactSet data.

March silver SIH20, +0.55%, meanwhile, added 8.3 cents, or 0.5%, to $17.775 an ounce, after putting in a 1.8% weekly drop last week.

Gold “seems poised to make another run at the $1,600 level and if it can get there, we could easily see a failed triple-top pattern open the door for a move to the $1,640 region,” said Moya, in a daily update.

The death toll for the novel strain of coronavirus climbed to more than 900 in mainland China, exceeding that of the severe acute respiratory syndrome, or SARS, that claimed 774 lives and infected about 8,100 people in 2002-03. The World Health Organization warned that the spread could accelerate, with more than 40,000 cases reported as of Monday.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya