Gold gains as stocks lose steam on surge in virus cases

• Spot gold was up 0.6pc to $1,574.66 per ounce at 0806 GMT.
• US gold futures gained 0.4pc to $1,577.90.
• The US dollar too was hovering close to a more than four-month high scaled against key rivals in the previous session.

Gold rose on Thursday as a surge in the number of new coronavirus cases in China dashed hopes the epidemic was slowing and drove investors to safe-haven assets.

Spot gold was up 0.6pc to $1,574.66 per ounce at 0806 GMT.

US gold futures gained 0.4pc to $1,577.90.

"The unfortunate increase in number of cases in the Hubei province, which is ground zero ... has affected risk-on sentiment," said John Sharma, an economist at National Australia Bank (NAB).

Hubei reported 242 new deaths and confirmed 14,840 new cases as of Wednesday, a dramatic rise from the 2,015 new cases a day earlier.

The fastest rise in the daily death count since the outbreak weighed on Asian equities, but lifted the safe-haven yen from a three-week low against the US dollar.

The US dollar too was hovering close to a more than four-month high scaled against key rivals in the previous session, making gold costlier for investors holding other currencies.

"With higher dollar index, the scope for gold to go much higher is limited," NAB's Sharma said.

Amid slowing global economic growth, negative Treasury yields and easing monetary policy around the world, investors are now looking for any information regarding the economic impact of the epidemic.

"The possibility of weakness in the economy in the coming days is the reason why investors are considering gold as a safe haven," said Hareesh V., head of commodity research at Geojit Financial Services in Kochi, south India.

The health emergency has led to disruption in global container shipping, with lines re-routing cargoes and reducing calls to Chinese ports.

"Shipments from many countries have already been delayed into China so that would impact both China and other related countries," Hareesh said.

Meanwhile, Federal Reserve Chair Jerome Powell on Wednesday said he expected some drag "soon" from the virus, even though he reaffirmed confidence in the US economic outlook.

In its policy meeting last month, the US central bank cautioned of a potential hit from the epidemic, while leaving the benchmark interest rates unchanged.

Elsewhere, palladium fell 0.8pc to $2,386 per ounce, silver rose 1.1pc to $17.66, and platinum gained 0.1pc to $962.29.