Gold prices rise as coronavirus fears persist

By Myra P. Saefong and Mark DeCambre, MarketWatch

Copper ends higher for the week, rebounding from a nearly 3-year low on Monday

Gold futures on Friday shook off losses seen shortly after the release of better-than-expected U.S. employment data, to settle higher as renewed worries about the spread of the coronavirus and it's impact on the global economy worked to pull U.S. benchmark stock indexes down from record levels.

The precious metal is still viewed by some commodity experts as a go-to asset in the face of an expected period of lower interest rates globally and nagging concerns about Wuhan virus.

See: Encouraging banks to tap Fed discount window could prevent another repo market freeze, says Quarles (http:// www.marketwatch.com/story/encouraging-banks-to-tap-fed-discount-window-could-prevent-another-repo-market-freeze-says- quarles-2020-02-06)

The U.S. created a better-than-expected 225,000 (http://www.marketwatch.com/story/us-adds-225000-jobs-in-january-as- hiring-speeds-up-unemployment-rises-to-36-2020-02-07) new jobs in January, reflecting surprising resilience in the labor market. The increase in new jobs easily surpassed the 164,000 forecast of economists surveyed by MarketWatch.

Gold prices appreciated "despite January's nonfarm payrolls smashing market expectations," said Lukman Otunuga, senior research analyst at FXTM.

"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," he told MarketWatch. "Nevertheless, appetite towards the precious metal may remain supported by coronavirus fears and global growth concerns."

Gold for April deliveryon Comex rose $3.40, or 0.2%, to settle at $1,573.40 an ounce. For the week, bullion lost about 0.9% based on the most-active contract, according to FactSet data.

March silver, meanwhile, fell 12.6 cents, or 0.7%, to $17.692 an ounce, following a gain of 1.2% on Thursday. Silver prices suffered a 1.8% weekly drop.

So far, 638 people have died from the novel coronavirus strain that reportedly originated in Wuhan City, China, and the number of cases have ballooned to 31,000 thus far since the start of January, China's National Health Commission said on Friday.

Some experts said the hotter-than-expected labor-market results may have been tempered by the uncertainty about the viral outbreak and its impact on the world-wide economy.

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."

Overall, worries about the virus, that is the same family as SARS, or severe acute respiratory syndrome, haven't managed to have a lasting impact on equity markets, with the Dow Jones Industrial the S&P 500 index and the Nasdaq Composite Index on Thursday all finishing at record. However, the benchmarks traded lower on Friday, (http:// www.marketwatch.com/story/dow-futures-pull-back-after-indexes-post-trio-of-records-ahead-of-friday-jobs-report-2020-02- 07)as gold futures settled.

The infectious disease has kept 10-year benchmark Treasury note yield below 1.60% (http://www.marketwatch.com/story/ treasury-yields-shift-lower-as-traders-brace-for-employment-report-2020-02-07), which has also provided support for haven metals that don't offer a coupon. Bond prices rise as yields fall.

Among other metals, March copper shed 1.5% to $2.553 a pound. It tallied a weekly rise of about 1.4%, after settling Monday at its lowest since May 2017.

Read: Copper prices may still have more to lose even after touching a nearly 3-year low (http://www.marketwatch.com/ story/copper-prices-may-still-have-more-to-lose-even-after-touching-a-nearly-3-year-low-2020-02-07)

April platinum tacked on 0.2% to $969.20 an ounce, with prices up 0.8% for the week, while March palladium lost 1.2% to $2,210.20 an ounce, losing nearly 0.7% from the week-ago period.

-Myra P. Saefong; 415-439-6400; AskNewswires@dowjones.com


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  02-07-20 1431ET
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