Gold prices breached the elusive and psychological level of $1600 today, as genuine concerns continue to grow in regards to the coronavirus (COVID-19).
According to a report by CNN the coronavirus has now infected more than 73,000 people around the world, mostly in mainland China. The death toll has now risen to 1,873 individuals, which includes five people who resided outside of mainland China.
The possible repercussions of this contagious disease spreading beyond China’s borders could be profound, and dramatically affect the global economy. We live in an interconnected world where what happens in one part of the world can have a dramatic affect globally.
As of 5:07 PM EST gold futures basis the most active April contract is currently up $18.80 and fixed at $1605.20. This is a net gain of 1.19%. It is not just gold that is trading dramatically higher on the day. Silver for example is currently up $0.43 which is a net gain of 2.43%, with March futures currently fixed at $18.165.
Platinum has also shown a strong gain today up 2.76%, and after factoring in today’s gain of $28.70 is currently fixed at $995.50. However once again the largest percentage gainer is palladium, which has gained 8.59% in trading today. After factoring in today’s gain of $199, palladium futures are currently fixed at $2516.
These gains have occurred even though there is extreme dollar strength providing strong headwinds. Currently the dollar index is up 0.33%, and fixed at 99.325.
The index is now trading above the highs achieved in August and September 2019. In fact the last time the dollar had this type of strength occurred during the week of March 27, 2017.
Dollar strength becomes very apparent when looking at the current price of spot gold which is fixed at $1602.60. According to the KGX (Kitco Gold Index) normal trading has added $26.50 in value, however after factoring in a decline of $4.70 based on dollar strength the net result in spot gold is a gain of $21.80.
by Gary Wagner for KitCo News