Gold price edges lower as traders take profit after significant rally
The price of gold dipped a little over 1% on Tuesday after traders opted to take profit after an impressive bull run.
Gold prices slumped by 1% on Tuesday after traders opted to take profit from an impressive bull run that has seen the precious metal rally 30% since June last year.
The precious metal rose to a seven-year high in its previous session, driven by investors growing increasingly concerned about the spread of the coronavirus, with cases of the outbreak reaching mainland Europe over the weekend.
Gold is trading at $1656 an ounce as of 16:35 (GMT) on Tuesday.
Coronavirus fears send global stocks plummeting
Global equities have continued to tumble this week after a rise in coronavirus cases renewed fears of an economic slowdown.
The Dow Jones and S&P 500 fell more than 1200 and 100 points respectively since Monday, representing a 4% decline for both benchmarks.
Meanwhile, the FTSE 100 threatens to fall below 7000 after sliding more than 5% this week.
‘There has been so much complacency in recent weeks from investors, despite clear signs that China's economy is facing a large hit and that supply chains around the world were being disrupted,’ investment director at AJ Bell, Russ Mould, told the BBC.
‘Markets initially wobbled in January, but had quickly bounced back, implying that investors didn't see the coronavirus as a serious threat to corporate earnings. They may now be reappraising the situation.’
As confirmed cases of the virus continue to rise investors will likely drive the price of gold higher, with the commodity considered a haven during times of uncertainty.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Trade on commodities
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
1In the case of all DFBs, there is a fixed expiry at some point in the future.
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.