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Gold Prices Jump on Coronavirus Cases

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The gold futures contracts gained ground on Thursday during the Asian trade session. Financial market participants were spooked by the sudden increase in coronavirus cases in the Province of Hubei, China.

This renewed a risk off atmosphere which sent equities lower and a safe haven asset classes, which include the yellow metal, higher. There are, once again, worries over the extent of the economic damage that this deadly virus will cause to China and other economies around the region and globe.

As of 3:15 am GMT, the widely traded spot gold futures contract inched higher. The spot contract added 0.4 percent to trade at $1,571.70 per ounce.

The U.S. gold futures contract, for front end delivery, also rose. This contract added 0.2 percent to fetch $1,574.90 per ounce.

Gold Traders react to Coronavirus Headlines

On 12 February, the Chinese province of Hubei reported disturbing virus numbers. There are 14,840 new cases of the deadly coronavirus. The death toll in Hubei also spiked. This number jumped from 242 to 1,310.

Health officials in the province said they included cases diagnosed with a new method. This worried the financial markets as traders looked for safety.

The coronavirus broke out, last month, in Hubei in the city of Wuhan. The virus has since spread to 24 other countries and is shaking up market sentiment.

Key U.S. Inflation on the Economic Calendar Today

Looking at the economic calendars today, the headline event is the January U.S. consumer price index (CPI). The U.S., at 1:30 pm GMT, will release the both core and headline CPI indices. The United States is also releasing monthly unemployment claims.

On the Eurozone economic calendar, the European Union (EU) will publish their updated economic forecasts.  Germany will release monthly consumer price index data today, as well. The United Kingdom is set to release minor housing data, their RICS housing price (balance) 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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