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Gold Futures Ease Lower as Traders Assess Virus Fears

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Gold futures contracts fell lower during the early Asian trade session on Wednesday. Traders are monitoring risk appetite and a possible global epidemic from China’s coronavirus as the first case has just been confirmed in the United States.

The toll from the coronavirus in China is now at six deaths. Yesterday, the first case was reported in the United States. This sent the financial markets sharply lower, overnight, as traders worried about the economic toll from the outbreak. Tourists have also canceled travel plans and global airports are increasing screening for the virus.

Traders are increasingly alarmed as hundreds of millions of citizens from China will travel for the Chinese Lunar New Year holiday.

As of 1:30 am GMT, the widely traded spot gold futures contract was down 0.3 percent to trade at $1,553.27 per ounce. Yesterday, the spot contract was trading near a two week high price point before shedding one percent.

U.S. gold futures, for front month delivery, also shed 0.3 percent to trade at $1,553.30.

Gold Traders Wait on the Bank of Canada as well as the Coronavirus

Traders are monitoring the outbreak of the coronavirus in China. This virus has just been confirmed in the United States, as the Center for Disease Control (CDC), says that the first patient is infected with the virus

On the economic calendar, the United States is scheduled to release existing home sales data.

The Bank of Canada will announce monetary policy and their rate decision, later today during the North American trade session. The BOC is also holding a press conference after the announcement. With that said, financial traders are expecting the BOC to stand firm with rates and their monetary policy.

Traders will look towards the bank’s press conference to see if the BOC is adopting a more of a dovish stance with future monetary policy. Canada is also releasing key inflation data with their consumer price index.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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