Gold gains and Oil falls as coronavirus death toll rises

Death toll at 81 and 35 million residents in quarantine rocks commodities

Global markets continue to be affected by the looming pressure of the coronavirus outbreak in China.

With twelve cities and 35 million residents in quarantine and the death toll rising from 56 to 81, the crisis looks set to continue.

Oil prices have notably plunged as a result of growing concerns, with both Brent and West Texas Intermediate (WTI) Futures continuing Sunday’s plunge. By mid-morning trading Brent stands at $58.91 per barrel, down 2.93 per cent, while WTI has fallen 3.06 per cent and stands at $52.53 per barrel.

On Sunday Prince Abdulaziz bin Salman, Saudi Arabia’s Energy Minister, admitted that the oil-rich nation was “closely monitoring” the effect of the virus on the market and argued that the recent drops were: “primarily driven by psychological factors and extremely negative expectations adopted by some market participants, despite its very limited impact on global oil demand.”

Such ‘negative expectations’ have arguably contributed to the increase in the value of gold. The yellow metal is go-to safe-haven asset at times of geopolitical and economic uncertainty. By mid-morning trading spot gold currently stands up 0.68 per cent at $1,581.64.

Bitcoin (BTC), which has been seen by some as a potential hedge against uncertainty is also up 0.29 per cent at $8622.28.

What is your sentiment on Oil - Brent?

Vote to see community's results!

Although the Saudi Energy Minister may have descried ‘extremely negative expectations’, politicians within China have actually increased concerns. President Xi Jinping stated that the country is facing a “grave situation” and that the spread of the coronavirus is actually accelerating.

Although Wuhan, the epicentre of the outbreak, is under quarantine news that 5 million citizens left the city to celebrate Chinese New Year elsewhere has raised fears yet further.

As of 00:00 on January 27 there are 2,744 confirmed cases in mainland China, more than triple the number of cases the Chinese government reported late on January 24.

FURTHER READING: What is the coronavirus and how could it affect stock markets?

FURTHER READING: US and Europe in Davos clash over climate crisis

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
iPhone Image
Trade the world’s top tokenised stocks, indices, commodities and currencies with the help of crypto or fiat
iMac Image
Trade the world’s top tokenised stocks, indices, commodities and currencies with the help of crypto or fiat
iMac Image