Gold spikes to a nearly 7-year high as investors flee to safety amid coronavirus worries
- Gold soared as high as $1,611.10 per ounce on Wednesday as traders migrate from virus-exposed assets to traditional safe havens.
- The precious metal is just a slight jump away from passing its February 8 intraday high and hitting its loftiest levels in seven years.
- The coronavirus outbreak has weighed on economic growth forecasts and stock prices alike in recent weeks, leaving investors to hunt for new ways to eke out gains.
- Watch the price of gold update live here.
Gold surged on Wednesday as coronavirus' rising death toll pushed investors into traditional safe-haven investments.
The precious metal traded as high as $1,611.10 per ounce on Wednesday after breaking through the $1,600 level earlier this week. It remains slightly below the $1,613 high seen on January 8, the loftiest level its enjoyed in nearly seven years.
Gold serves as a safe-haven for investors looking to avoid volatility in risk assets like stocks and bonds. The metal's historic value and scarcity lends itself as a popular hedge for those expecting financial markets to slump in the near future. The continued economic threat posed by coronavirus is likely pushing capital away from assets with exposure to the outbreak's fallout and toward safe havens.
The novel coronavirus has killed 2,012 people and infected more than 75,000 as of Wednesday morning. Numerous economists have downgraded growth expectations for the global economy in recent weeks as the outbreak ensnares supply chains, Chinese demand, and worldwide tourism.
Individual companies are also feeling pressure from the outbreak's fallout. Apple announced on Monday that the weeks-long closure of its factories in China will drag quarterly revenue below its initial estimate. The iPhone maker's stock tumbled as much as 3.2% in Tuesday trading.
Adidas warned on Wednesday that its sales in Greater China slumped 85% year-over-year in the period beginning January 25 as the coronavirus slashed into customer traffic and prompted store closures.
"We have been experiencing a material negative impact from the coronavirus outbreak on our operations in China," the company said in a statement to Business Insider.
The surge in gold's price arrives hours before the Federal Reserve releases the minutes of its late January meetings. The document is expected to shed light on whether the central bank will enact any economic stimulus to counteract virus effects on the world economy. While the Fed has said the outbreak brings a "new risk" to its economic outlook, it's also hinted at keeping interest rates stable until inflation reaches its 2% target.
Other precious metals gained Wednesday as coronavirus fears intensified. Silver gained as much as 1.1%, while platinum jumped as much as 2.3% in early trading. Palladium extended its multiday winning streak into Wednesday, soaring 6% to bring year-to-date gains to 38%.
Gold traded at $1,606.40 per ounce at 10:45 a.m. Wednesday, up about 6% year-to-date.
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