Fear gave way to panic and then absolute terror as there was pandemonium in global markets on account of the spread of the Coronavirus 2019. The Dow Jones tanked 603 (over 2% points) as the death toll crossed the 230 mark and number of infected cases surpassed 9000 across 20 countries. The lockdowns in various cities close to Wuhan has affected over 60 million people.
The US has imposed travel ban on people returning from China (effective Sunday) and compulsory quarantine for US citizens travelling from the region. With 17% share in global economy, China is expected to impact global economy far more than during the SARS virus outbreak 17 years ago. In a worst case scenario, Chinese GDP growth is projected to take a 1.1% hit. As a result of all of the above, investors flocked to gold even leaving currencies to the wayside. Gold opened in London at $1,580.85 per ounce in London (am fix) and then vacillated between $1,571 and $1,591 per ounce throughout the day.
The London pm fix was $1,584.20 per ounce. However, there was more action in New York after the markets closed in London and the rest of Europe. The yellow metal ended the week in the 1,588-1,589.50 per ounce region It could be mayhem next week at the bourses worldwide and gold could even challenge and stay above the $1,600 per ounce mark.
In Mumbai, the BSE closed with a fall of almost 190 points at 40,723.49 largely due to the virus scare and discounting for any union budget impetus or otherwise. As the action took place globally in the bullion markets only after the Mumbai close, the gold price reacted only to previous day closing of the gold price overseas. It opened in Mumbai at Rs.40,735 per ounce only to recover marginally and end at Rs.40,791 per 10 gms, a net loss of Rs.57. Silver on the other hand opened higher by Rs.250 at Rs.46,420 per kg and closed lower at Rs.46,395 per kg, a net gain of Rs.225.