(Reuters) - Gold rose on Wednesday, holding above $1,600 per ounce, as worries over the new coronavirus and its impact on global growth boosted safe-haven demand, while palladium continued its record run driven by short supplies of the metal.
Spot gold was up 0.3% to $1,606.44 per ounce by 11:02 a.m. EST (1602 GMT). The session high was $1,610.80, its highest since Jan. 8, when gold hit its highest in nearly seven years.
U.S. gold futures rose 0.4% to $1,609.70 an ounce.
“Gold is holding above the $1,600 level, we went through pretty quick and the reason to stay above is that we are still fetching unknown on this market place about this virus in China,” said Bob Haberkorn, senior market strategist at RJO Futures.
China is struggling to get manufacturing back online after severe travel restrictions were imposed to contain the coronavirus.
Stoking concerns further, Apple Inc on Monday warned that its sales might fall because of slow ramp-ups in manufacturing facilities in China.
“The uncertainty regarding when the global supply chain will return to normal is likely to continue to squelch trader and investor risk appetite for at least the near term. That’s bullish for the precious metals markets,” Kitco Metals senior analyst Jim Wyckoff said in a note.
Reflecting positive investor sentiment towards bullion, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose to their highest since Nov. 11, 2016 on Tuesday. [GOL/ETF]
Limiting gold’s advance were better-than-expected U.S. housing starts data and stronger equity markets, lifted by signs of slowing coronavirus infections. [.N]
Markets now await the minutes of the U.S. Federal Reserve’s last policy meeting, due at 2 p.m. EST (1900 GMT).
Palladium jumped 1.9% to $2,684.89 an ounce after hitting a record high of $2,841.54.
The autocatalyst metal gained 54% in 2019 on supply shortages and will remain in a substantial deficit in 2020 as well, Anglo American Platinum Ltd said.
“What we are seeing is likely some commodity traders loading up on the metal in anticipation of China’s door reopening,” said Daniel Ghali, commodity strategist at TD Securities.
“Once the coronavirus impact on logistics and supply chains dissipates, we anticipate that demand from China for palladium is going to come back very quickly which will further strengthen the metal’s demand.”
Silver rose 0.6% to $18.27 after hitting a more than one-month high, while platinum climbed 1.4% to $1,005.24.
Reporting by Brijesh Patel in Bengaluru; Editing by David Gregorio