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.
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.
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