Gold futures spiked Monday to their highest finish since February 2013, as the spread of COVID-19 to Italy and other parts of the world brought about more nervousness into the markets, lifting demand for safe-havens assets including gold.
The precious Yellow metal has become a more widely desired currency again, it is very liquid in here.
In the short term, gold is “going to remain extremely volatile as the uncertainties around the current global economic impact from COVID-19 keeps the fear and uncertainties in gold’s favor,” said 1 trader I spoke to Tuesday morning in Asia.
Gold futures GCJ20, -1.15% advanced 27.80, or 1.7%, to settle at 1,676.60 oz driving the precious Yellow metal the round psych mark at 1,700 that it has not cracked since Y 2012. The shiny metal has marked its highest most-active contract settlement since February of 2013, according to FactSet data.
Risk-off has taken hold of global markets as investors are growing concerned that the market could be on the verge of a massive meltdown as we are moving well past the weak Chinese recovery scenario, I do not see that happening.
The Fed is likely to be forced to cut interest rates to respond to economic growth concerns, partly driven by the spread of the coronavirus outside of China, according to economists at a Top policy conference Monday.
Precious metals like gold tend to attract buyers in a low interest-rate climate.