Gold rises on rising business impact of virus outbreak

• Spot gold was up 0.4pc at $1,586.93 per ounce by 0717 GMT.
• Earlier in the session, prices touched their highest since Feb. 3 at $1,587.40.
• The U.S. dollar, also considered a safe-haven asset during times of economical and political uncertainties, rose to an over four-month high against key rivals.

Gold prices rose to a two-week high on Tuesday, spurred by demand for safe-havens after iPhone maker Apple Inc's revenue warning underscored the financial fallout of the coronavirus epidemic in China.

Spot gold was up 0.4pc at $1,586.93 per ounce by 0717 GMT.

Earlier in the session, prices touched their highest since Feb. 3 at $1,587.40.

U.S. gold futures inched up 0.2pc to $1,590.

"Asian-Pacific markets have opened broadly lower. Investors right now are very concerned about the economic impact of the coronavirus, also on business sentiment and consumer demand," CMC Markets analyst Margaret Yang Yan said.

Apple has cut revenue forecast for the March quarter on the disruption in China due to the virus and weaker demand from the Chinese market, leading to a risk-off sentiment in the market, she said.

Apple is one of the largest Western firms to be hurt by the epidemic.

It said manufacturing facilities in China that produce iPhone and other electronics have begun to reopen, but they are ramping up more slowly than expected. That pushed U.S. stocks futures as well as Asian shares lower.

The death toll from the virus in mainland China rose by 98, even as its spread slowed with the number of new cases falling below 2,000 as of Monday. However, global experts warned it was too early to say the outbreak is being contained.

Meanwhile, China continued its effort to ease the drag to the businesses, with its central bank cutting the interest rate on its medium-term lending on Monday.

On the technical front, "gold sits only 10 dollars or so away from major resistance in the $1,595/1,600 an ounce region. A daily close above this area would be a strong technical signal that further gains lie ahead," Jeffrey Halley, senior market analyst at OANDA, said in a note.

The U.S. dollar, also considered a safe-haven asset during times of economical and political uncertainties, rose to an over four-month high against key rivals.

"Dollar and gold are negatively correlated, but at this moment even though dollar is moving higher, gold is moving higher and that means the demand for safety is outweighing the currency impact on gold," CMC's Yan said.

Elsewhere, palladium was flat at $2,522.79 an ounce after hitting a near one-month peak of $2,538.25 earlier in the session.

Silver advanced 0.6pc to $17.86, while platinum was up 0.5pc to $973.49.