Metals Gain Steam Heading Into The Weekend
Gold stocks and gold futures shrugged off losses from earlier in the week, on Friday. Despite better than expected jobs data, worries on new coronavirus cases swiftly changed course in a very bullish way. This is considering the fact that the U.S. created 225,000 jobs in January, which was 61,000 jobs more than expected.
However, the main concern continues to be on the global economic impact of the virus. In light of this, we saw major markets decline while safe-haven stocks pushed higher. Gold and gold stocks are still some of the most popular in the category. This is especially true during a low rate climate like we’re in right now. Throw in concerns over the Wuhan virus and there could be a perfect climate for higher gold prices.
“The positive jobs report should reinforce optimism over the U.S. economy and boost appetite towards king dollar, which could be bad news for gold. Nevertheless, appetite towards the precious metal may remain supported by coronavirus fears and global growth concerns.”Lukman Otunuga, senior research analyst at FXTM
Death Toll Rising
So far, 638 people have died from the coronavirus strain. It initially originated in Wuhan City, China. Furthermore, the number of cases has increased to 31,000 since the beginning of the year. This is according to China’s National Health Commission said this week.
In addition, the disease has kept 10-year benchmark Treasury note yields below 1.60%. This has also allowed for the support of safe-haven metals. Bond prices are increasing as yields fall.
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On top of this, as we’ve said on GoldStocks.com before, the larger global concerns could outweigh positive jobs figures as some analysts agree. Chris Gaffney, president of world markets at TIAA Bank, said: “the positive report gives investors some confidence in the U.S. economy, but a possible global growth slowdown could still impact the U.S.”
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