Gold prices rose to a two-week high on Tuesday as the spread of a new virus in China stoked fears of a wider epidemic, sparking a sudden bout of risk aversion and sell-off in Asian stocks.
Spot gold prices touched their highest since Jan. 8 at $1,568.35 and were up 0.1 per cent to $1,563.01 per ounce by 0730 GMT. US gold futures were 0.3 per cent higher at $1,564.10.
[ Customers select gold bracelets at Caibai Jewelry store in Beijing (Courtesy: Reuters) ]
Asian shares slipped as the new coronavirus has spread to more Chinese cities and concerns mounted it could spread further with many traveling for the Lunar New Year holidays.
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Gold prices were driven by “the rapid spread of the virus from Wuhan, China, which has caused panic”, said Margaret Yang Yan, a market analyst at CMC Markets.
“Chinese New Year holidays are going to worsen the situation as people are bound to travel in China. The fear of outbreak is going to drive up demand for gold for a couple more days,” she added.
China will start celebrating the Lunar New Year this weekend. The yen also gained on concerns of a wider outbreak, which has prompted the World Health Organisation to convene an emergency meeting to assess the situation.
Source: Thanks WIONews.com