By Barani Krishnan
Investing.com – Gold posted its best monthly gain in five on Friday as fears over China’s coronavirus epidemic drove more safe-haven buying in the yellow metal.
Gold futures for April delivery on New York’s COMEX settled the day down .30, or 0.01%, at 87.90. That didn’t stop the contract from posting a gain of more than 4% for January, the best performance for a benchmark gold contract since August.
But spot gold, which tracks live trades in bullion, was up strongly, rising .11, or nearly 1%, to ,588.03 per ounce by 3:00 PM ET (20:00 GMT). That gave bullion a gain of nearly 5% for January, also the best performance in five months.
“This reflects the notion that the gold trade is one associated with loss-aversion,” TD Securities said in a note that cited gold’s superior performance to stocks on Wall Street, which were on track to their first monthly loss in five.
The investor flight from equities and other risky assets such as oil continued on Friday as China reported more than 200 deaths and 10,000 infections from the coronavirus.
The crisis has brought the world’s second-largest economy to a virtual standstill, with Goldman Sachs (NYSE:GS) revising down China's 2020 GDP growth expectations to 5.5% from 5.9%.
Global markets briefly calmed late on Thursday after the World Health Organization gave China top marks for its efforts in battling the epidemic and containing it largely within its borders, despite the contagion spreading to nearly two dozen other countries. Yet, when trading resumed Friday, sentiment crashed again.
