Gold Futures Settle Sharply Higher On Safe-haven Appeal
Gold prices rose sharply on Friday, as reports about the rapidly spreading coronavirus outbreak raised concerns about the outlook for the global economy and prompted investors to shun riskier assets and seek the safe haven of the yellow metal.
Weak economic data and rising bond yields too contributed to gold’s uptick.
Gold futures for April ended up $28.30, or about 1.8%, at $1,648.80 an ounce, the highest level since mid February 2013.
Gold futures gained about 3.9% in the week, the largest weekly returns since June.
Silver futures for March ended up $0.211 at $18.530 an ounce, while Copper futures for March settled at $2.6080 per pound, gaining $0.0200 for the session.
In economic news, existing home sales in the U.S. pulled back in January after jumping in December, according to a report released by the National Association of Realtors on Friday, with existing home sales continuing a fluctuating pattern of monthly increases and declines.
NAR said existing home sales slumped by 1.3% to an annual rate of 5.46 million in January after surging up by 3.9% to a revised rate of 5.53 million in December. Economists had expected existing home sales to tumble by 1.8%.
Despite the monthly decrease, the report noted existing home sales in January were up by 9.6% compared to the same month a year ago.
The IHS Markit US Composite PMI fell to 49.6 in February 2020 from 53.3 in the previous month, pointing to the first month of contraction in the private sector since October 2013.
The IHS Markit US Manufacturing PMI fell to 50.8 in February of 2020 from 51.5 in January, while Services PMI dropped to 49.4 in the month, from 53.4 a month earlier.
Meanwhile, on the virus front, Chinese officials reported 1,109 new confirmed cases of the coronavirus, up sharply from 349 cases the previous day. Meanwhile, South Korean health authorities also reported 52 new cases of the fast-spreading disease, raising the national tally to 156, while the number of confirmed cases in Japan increased by 23 to 728.
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