Gold Price Update on Jan 28, 2020 - Gold to the forefront as coronavirus panic spreads

Panic spread on Monday as the Coronavirus (Wuhan) threatened to engulf the globe. With over 50 million people virtually rendered immobile and over 80 deaths and 5 confirmed infected cases in the USA, investors flocked to gold and the USD to have enhance their safe haven status. The Dow crashed by around 458 points and the BSE Sensex too shed over 458 points. The spread of the virus revived painful memories of the 2003 Sars virus that left around 800 dead and over 8000 infected people worldwide.

Then, the S&P had declined by over 8% between December 2002 and April 2003, while gold had gained over 4% in the same period. But, in the next six months the S&P rose by nearly 20% while gold began its journey (with ups and downs) to its all-time high level of $1,926 per ounce in September 2011. Gold shot off the blocks on Monday as it sped its way to $1,589 per ounce in early Asian trading. It vacillated throughout the day between $1,576 per ounce and $1,587 per ounce. It opened in London at $1,583.45 per ounce (am fix) and closed there at $1,580.10 per ounce (pm fix). In New York trading professional traders took over as the yellow metal made repeated attempts to breach the $1,587 per ounce resistance level and ended in New York around the $1,582 per ounce region. In early Asian trading gold is in the $1,582-1,583 per ounce region. At the moment it all depends on how far the coronavirus spreads and how soon it is brought under control. The US Fed meet, the crucial BoE meet to decide the post Brexit era as well as the Union Budget in India this week now take a backseat.

In the domestic market, the Sensex fell by 458 points while the dollar climbed to nearly Rs.71.50, gold opened higher by Rs.465 at Rs.40,692 per 10 gms. It closed in Mumbai even higher at Rs.40,814 per ounce, a net gain of Rs.657 during the day. Silver too rose sharply and ended the day with a gain of Rs.1,250 per kg. (both gold and silver, IBJA closing rates in Mumbai. Both the precious metal are now at the mercy of overseas trends (read `Coronavirus’).

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