March 19, 2020
Gold falls more than 1 percent as investors resume cash stockpiling
(Reuters) - Gold prices fell more than 1% on Thursday in volatile trade, as investors sought to hoard cash in unstable market conditions despite additional measures from the European Central Bank to deal with the economic fallout from the coronavirus outbreak.
Spot gold slid 1.3% to $1,466.20 per ounce by 0327 GMT after rising 1% in early trade. The metal fell about 3% on Wednesday along with other precious metals.
U.S. gold futures fell 0.7% to $1,467.70 per ounce.
"It's about containing the virus and restoring confidence in economic activity," said DailyFx currency strategist Ilya Spivak.
"All these supports are geared to boost the economy when the virus is contained but in the near term, that's difficult as no amount of credit easing would contain a virus. It'll just make it easier for the economy to recover after it's contained."
The dollar surged close to a three-year high hit in the previous session, while bonds plunged and stocks struggled to find their footing as the ECB's latest stimulus provided only brief solace at a time when the world grapples to contain the pandemic.
The ECB launched a 750 billion euro ($818 billion) emergency bond purchase programme on Wednesday to push down borrowing costs in a bloc struggling with the economic fallout of the
Governments and central banks across the world are taking measures to combat the damage to the global economy from the epidemic.
The Japanese government is expected to lay out economic packages, while Germany's Chancellor urged its citizens to adhere to rules aimed at reducing social contact.
U.S. President Donald Trump moved to accelerate production of desperately needed medical equipment to battle the outbreak and said an estimate that U.S. unemployment could conceivably
reach 20% was a worst case scenario.
The U.S. Senate overwhelmingly passed legislation providing billions of dollars to limit the damage from the outbreak through free testing, paid sick leave and expanded safety-net spending.
"Bullion owners in any form, physical, paper or scrap, will probably continue to liquidate in order to boost capital levels, the more protracted the COVID-19 global lockdown extends," Stephen Innes, chief market strategist at AxiCorp, said in a note.
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.66% to 923.69 tonnes on Wednesday.
Palladium was 4.2% lower at $1,520.51 per ounce after sliding more than 5% earlier, while platinum fell for a seventh-straight session and was last down 3.4% to $603.06.
Silver hovered close to an eleven-year low hit in the previous session, falling 0.6% to $11.91 an ounce.