March 18, 2020 / 3:51 AM / 23 days ago

PRECIOUS-Gold reverses course to fall 1% as flight for cash resumes

 (Recasts, updates prices and adds comments)
    * Dollar holds near four-week high
    * Global stocks tumble 
    * GRAPHIC-2020 asset returns: tmsnrt.rs/2jvdmXl

    By K. Sathya Narayanan
    March 18 (Reuters) - Gold erased early gains to fall more
than 1% on Wednesday as mounting fears over the economic hit
from the coronavirus overshadowed additional stimulus measures
by the United States and prompted investors to sell precious
metals to hoard cash.
    Spot gold        fell 1.1% to $1,511.72 per ounce by 0701
GMT. U.S. gold futures         were down 0.9% to $1,512.10 an
ounce.
   "The fact that equity markets are still falling is signalling
deteriorating global sentiment, which means more investors are
going for cash," said Michael McCarthy, chief strategist at CMC
Markets.
    "Globally, we are lengthening our expectations of how long
the economic interruptions from the virus will last and that's
another reason driving people to cash." 
    U.S. stock futures and several Asian shares fell in choppy
trade as worries about the virus eclipsed hopes broad policy
support would combat the economic fallout of the outbreak.
           
    The U.S. dollar        eased, but hovered near a four-week
high scaled on Tuesday against key rivals, making gold costlier
for investors holding other currencies.       
    The U.S. Federal Reserve said on Tuesday it would reinstate
a funding facility used during the 2008 financial crisis to get
credit directly to businesses and households as fears over a
liquidity crunch due to the virus have grown in recent days.
            
    Meanwhile, the Trump administration pursued a $1 trillion
stimulus package that could deliver $1,000 checks to Americans
within two weeks to cushion the economy.
    The U.S. measure helped gold prices rise 1% in early Asian
trade before the metal changed its course. 
    "That had boosted sentiment a little and we saw the
unwinding of some of that behaviour, which is 'sell gold among
everything else to find cash,'" IG Markets analyst Kyle Rodda
said.
    Among countries and central banks providing stimulus to
their virus-hit economies, Britain launched a new lending scheme
to provide short-term bridging finance for large businesses hurt
by the epidemic, which will be run and funded by the Bank of
England.             
    Underscoring the economic strain from the virus, a survey
showed that the mood among German investors slumped in March to
levels last seen at the beginning of the world financial crisis
in 2008 due to alarm at the impact on Europe's largest economy.
            
    Among other precious metals, palladium        fell 0.7% to
$1,631.42 per ounce, while platinum        eased 0.1% to
$660.75. Silver        was 1.2% lower at $12.44.

 (Reporting by K. Sathya Narayanan in Bengaluru; Editing by Anil
D'Silva and Subhranshu Sahu)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below