By Barani Krishnan
Investing.com – Gold prices hit their highest levels in 10 days on Thursday as haven buyers flocked back to the yellow metal amid a new spike in deaths and infections reported by China from its Covid-19 epidemic.
Gold futures for April delivery on New York’s COMEX settled up $7.70, or 0.5%, at $1,575.10 per ounce. It peaked at $1,581.35 earlier, its highest since Feb. 3.
Spot gold, which tracks live trades in bullion was up $10.58, or 0.7%, to $1,575.91 by 2:30 PM ET (19:30 GMT).
China on Thursday reported a sharp spike in deaths and infections from a new virus after the hardest-hit province of Hubei applied a new classification system that broadens the scope of diagnoses for the outbreak, which has spread to more than 20 countries.
The death toll in China reached 1,367, up 254 from the previous day. The number of confirmed cases jumped 15,152 to 59,804. The unusually large increases were due to the change in Hubei’s approach.
Japan reported its first death, a woman in her 80s who had been hospitalized since early February. She is the third confirmed fatality outside of mainland China, after deaths in the Philippines and Hong Kong.
TD Securities said in a note that gold’s recent range-bound trades were related almost entirely to developments on the Covid-19 front.
“Indeed, we believe a reversal of recent safe-haven flows, driven by fears that the Wuhan coronavirus could contaminate global reflation, appears to be an obvious candidate for a narrative-driven reversal,” it said.
“Gold is a crowded trade, although the marginal day-to-day flow appears to be driven by the change in risk sentiment as it relates to safe-haven demand.”