Gold Near Two Week High on Safe Haven Bid Due To Virus and IMF Global Growth Concerns

By Mark O’Byrne of GoldCore

CEO, GoldCore • Jan 21, 2020 at 8:21 AM EST

Gold prices rose to a two-week high today prior to giving up the initial gains.

Gold prices rose to a two-week high today prior to giving up the initial gains. Spot gold prices reached their highest since January 8th at $1,568.40/oz prior to falling to $1,556.60/oz.

The spread of a new virus in China stoked fears of a wider epidemic in Asia, sparking a sudden bout of risk aversion and sell-off in Asian stocks, European stocks and U.S. stock futures.

The International Monetary Fund (IMF) cutting its world growth forecast for 2020 and 2021 is likely also leading to risk aversion and safe-haven bids.

The World Health Organisation (WHO) has convened an emergency meeting on the virus outbreak in Hong Kong and China.

Chinese Lunar New Year celebrations begin this weekend and there is expected to be the traditional strong demand for gold in China and there may be increased demand due to the virus.

“The fear of outbreak is going to drive up demand for gold for a couple more days,” one analyst told Reuters.

Safe-haven bids for gold were seen overnight as three rockets fell inside Baghdad’s Green Zone which houses government buildings, foreign missions including the U.S. embassy and U.S. troops.

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