Gold extends fall as investors rush to hoard cash
Asian shares fell in a topsy-turvy session following one of Wall Street's biggest one-day routs in history as headlines about the outbreak and its global economic impact whiplashed investor sentiment
Gold prices fell nearly 1.5% on Tuesday, extending losses from the previous session's meltdown, as investors continued to sell assets to keep their money in cash because of heightened concerns over the economic toll of the coronavirus outbreak.
Autocatalyst metals platinum and palladium rose more than 5% each in early trade before paring most of the gains. The metals were the worst hit in Monday's free fall since they are also considered industrial metals.
Spot gold fell 1.4% to $1,492.81 per ounce by 0311 GMT, having slumped as much as 5.1% on Monday to its lowest since November 2019.
Keep updated, follow The Business Standard's Google news channel
US gold futures gained 0.2% to $1,490.00.
"This is just a continuing trend of gold positions being liquidated as equity markets collapse. There is a trend towards holding cash in the market and that's being reflected in gold," said Jeffrey Halley, a senior market analyst at OANDA.
"With the meltdown in asset markets, it's clear that longer-term gold, silver and palladium holders are liquidating profitable positions to cover losses elsewhere."
Asian shares fell in a topsy-turvy session following one of Wall Street's biggest one-day routs in history as headlines about the outbreak and its global economic impact whiplashed investor sentiment.
The virus has infected more than 174,100 people globally.
The safe-haven Japanese yen held largely firm, while risk-sensitive currencies struggled to stay afloat as coordinated moves by central banks failed to quell investor trepidation over the virus.
In a surprise move on Sunday, the US Federal Reserve slashed rates back to near zero to help put a floor under a rapidly disintegrating global economy.
"There's a lot of risk in the system, which means to me that gold should be trading higher. And the Fed hit the panic button a little bit, suggesting they're quite worried about the economic recovery," said Stephen Innes, chief market strategist at AxiCorp.
"But we have to weigh it with the fact that equities are probably going to fall further as the economic damage is going to come out worse than expected. So, bad news and good news is both bad for gold right now."
Among other precious metals, palladium rose 0.1% to $1,618.48 per ounce, having plummeted as much as 18% in the previous session.
Platinum rose 0.6% to $666.50, having posted its biggest one-day percentage decline ever on Monday.
Silver fell 1.4% to $12.72, having touched its lowest since 2009 on Monday.
