Gold Slumps as PBOC Prompts Risk-on Move
Investing.com
Published Feb 04, 2020 09:57AM ET
By Peter Nurse
Investing.com - Gold prices fell sharply Tuesday, retracing after a positive January, as risk appetite grew on the back of the Chinese central bank showing its intent to support its economy given the damage caused by the coronavirus.
At 10:00 AM ET (1500 GMT), gold futures for April delivery on New York’s COMEX slid 1.4% to $1,560.95. Spot gold, which tracks live trades in bullion, was down 1.1%, at $1,558.63 per ounce.
Gold futures rose almost 4% for January, while bullion gained nearly 5%, the best performances for both since August.
Earlier Tuesday, the People's Bank of China stated it will inject a total of 500 billion yuan ($71.4 billion) into the money market to "maintain reasonable and adequate liquidity in the banking system during the period of epidemic prevention and control."
This helped Chinese stock markets close higher after Monday’s sharp losses and translated into gains in both Europe and early on Wall Street. Conversely, the yield on the United States 10-year benchmark Treasury rose 8 basis points to 1.60% as traders deserted this traditional safe haven.
Additionally, the dollar index, which tracks the greenback against a basket of six other currencies, pushed up 0.13% to 97.92. The dollar tends to have an inverse relationship with gold.
In fundamental news, India's gold imports in January plunged 48% from a year earlier to their lowest level in four months as the high prices curtailed purchases, Reuters reported Tuesday.
The world's second-biggest buyer of gold imported 36.26 tonnes in January, compared with 69.51 tonnes a year earlier.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.