Gold Extends Losses as Virus Panic Spurs Investors to Sell
(Bloomberg) -- Gold tumbled again as investors rushed to raise cash to cover losses in other volatile markets, with global leaders striking a pessimistic tone over the likely economic impact of the coronavirus crisis.
A wave of 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.
Spot gold dropped 2.9% and was at $1,470.71 an ounce by 11:56 a.m. in London. Prices are down more than 13% from a seven-year high reached earlier this month, and tumbled the most since 1983 last week.
Other metals also extended losses, with silver dropping more than 5%, platinum losing 4% and palladium falling 2.2%.
The sell-off in precious metals “reaches historic dimensions,” Commerzbank AG analyst Daniel Briesemann said in a note.
“Gold declines remain linked to investors’ need for cash,” Stephen Innes, chief market strategist at AxiCorp Ltd., said in a report. “A constant question on every bullion investor’s mind is why is gold retreating when uncertainty and risk-off sentiment is rising? Gold’s recent declines are chalked up to margin-related selling as equities fell.”
More and more countries are imposing travel restrictions and have closed schools, restaurants and canceled sporting events as deaths from the virus exceeds 7,000 globally.
©2020 Bloomberg L.P.