Gold futures hovered near unchanged Wednesday as traders weigh the spread of coronavirus cases, while equities appear poised for further gains as U.S. earnings reporting season moves into full swing.
Gold on Tuesday pulled back from a more-than-six-year high as equities bounced back from the previous session’s steep, virus-inspired selloff, dulling the metal’s haven appeal. Stock-index futures pointed to further gains for stocks on Wednesday.
“Profit taking on the last leg of the gold run is taking place as strong earnings are preventing global equities from falling off a cliff on virus concerns,” said Edward Moya, senior market analyst at Oanda,in a note. “The reasons to own gold easily outweigh the ones not too, but right now a pullback is needed before we can see the next leg higher.”
The coronavirus has now infected at least 5,327 people in China, while the death toll in the country has risen to 132.
The United Arab Emirates on Wednesday confirmed the first Mideast cases of the virus. Cases have also been reported in Taiwan, Germany, Vietnam and Japan included patients who haven’t been to China, according to the New York Times. No deaths outside of China have been reported.
Silver was consolidating after suffering a 3.3% fall on Tuesday.
“Although it is a precious metal with an industrial character, silver had clung firmly to gold’s coattails in the previous days and resisted the weak base metals prices,” said Daniel Briesemann, analyst at Commerzbank. “It has now taken a hit after all, however. Because silver dipped below the technically important 100-day moving average yesterday, the price slide could continue somewhat.”
March copper HGH20, +0.08% was up 0.1% at $2.581 a pound.