Forex Marketz Daily Forex News – Fully Markets Update
Gold futures contracts continued to inch higher during the Asian trade session on Wednesday. The spot contract is trading near a seven year price point, set earlier in the week.
The United States has issued an official warning about the domestic spread of the coronavirus. This news rattled Wall Street and will continue to reverberate throughout the global equity market on Wednesday.
As of 1:25 am GMT, the widely traded spot gold futures contract was up half a percent to trade at $1,643.49 per ounce. Yesterday, before the warning out of the United States, sentiment improved which sent the spot contract lower.
The spot contract fell 1.9 percent yesterday. On Monday, the spot contract hit its highest price point in seven years at $1,688.66 per ounce.
U.S. gold futures, for front end delivery fell lower. This contract lost 0.2 percent to fetch $1,647 per ounce.
Safe Haven Assets like Gold Benefit as Equities fall lower as Sentiment Plummets
Asian equities were falling on Wednesday as safe assets were back in demand. Risk-off appetite has, once again been turned back on.
Overnight the United States warned their citizens to prepare for the possibility of a pandemic. This sent Wall Street lower alongside Treasury yields as traders flew into safety. The ten year Treasury yield is now at a record low.
The U.S. is preparing as the coronavirus has spread into European Union member nations, Italy, Germany and Spain. There are more cases being reported in South Korea and Italy. Also Iran is reporting an uptick in new cases.
Gold Traders worry about the Economic Impact of a Pandemic
Traders are starting to grow more and more concerned as the outbreak spreads beyond China. Most of the Asian economies are now expected to slow, halt or even contract in the first quarter of 2020.
This is prompting index futures swaps, with global central banks, to price in further monetary easing to insulate against economic damage. U.S. money market futures are now fully pricing in a 25 basis point rate cut from the Federal Reserve by their June policy meeting.
