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Gold prices hit seven year high

Stocks in the United States continued to drop yesterday in response to the coronavirus outbreak, pushing the market into a correction, described by analysts as a 10 per cent decline.

US stocks continue to drop as more than US$3 million was lost over six days.

Reuters reported on Thursday that as stocks hit the skids, more than US$3 trillion evaporated over a six day time span.

Yields for US treasuries also hit record lows as investors turned towards safe havens.

The new source of discomfort is the spread of the virus outside of China which was the first source of the outbreak.

The spread of the novel coronavirus outside China, where it originated, continues to be a source of discomfort for investors.

Dozens of European companies have warned about potential damage to their profits. In the United States, Goldman Sachs warned also that increased earnings are not likely for 2020 for many companies and Microsoft warned about its results.

Reuters reported on Thursday that spot gold rose 0.5 per cent to US$1,649 per ounce and silver gained one per cent to US$18.03 an ounce. Gold prices hit a seven-year high at near US$1,688 per ounce on Monday.

The price of gold rose half per cent yesterday as silver gained one per cent.

The news source quoted Peter Kinsella, global head of FX strategy at UBP in London as stating, “Safe-haven currencies are doing very well and gold is heading back higher, and unless we see a slowdown in the coronavirus cases outside China, risk sentiment will continue to be undermined.”

Oil fell more than one per cent to its cheapest in over a year on Thursday

Oil fell to its lowest price in a year. (Photo: nytimes.com)

Analysts at SeekingAlpha.com said policymakers from Asia, Europe and the United States have begun to prepare for a steeper economic downturn.

South Korean stocks closed Thursday down 1.05 per cent at a four-month low. While the Bank of Korea downgraded its growth outlook, it kept interest rates unchanged.

China’s central bank says it is still offering liquidity support.

The People’s Bank of China continues to offer liquidity to offset effects.

Taiwan has raised its epidemic response level to the highest possible, Seekingalpha reported

Meanwhile, Japan’s Nikkei dropped two per cent to a four-month as investors worried that the Tokyo Olympic Games might be affected.

The news site reported that safe-haven currencies such as the Japanese yen and the Swiss franc gained on Thursday. The yen moved to 110 yen to the dollar, up almost two per cent while the dollar fell 0.32 per cent.