Gold could hit all time high

Financial and commodity markets analytics

Gold is once again being sought out as a safe haven for investors, hitting its highest level since 2013 after a deadly virus outbreak in China which is now threatening to spread worldwide and the consequences to overall world economic health could be significant. 
Financial markets across China were closed for an extra day after officials extended the Lunar New Year break from the original Jan. 30 date in a bid to reduce travel. Authorities have also restricted movement in a number of cities with a total population of around 40 million people as they attempt to contain the virus.
"Safe-haven buying has been triggered by this virus in China and we're seeing a big sell-off in equity markets, it's mostly panic, the markets are looking at the prospect of the Chinese economy slowing down," said Edward Meir, analyst at ED&F Man Capital Markets.
There are now fears that the outbreak in China could continue to wreak havoc and and may leave investors even more on edge which is only going to add to the appeal of the world’s favorite precious metal.
This is especially true if the virus spreads further in the US where the number of domestic cases hit five, according to Centers for Disease Control and Prevention.
The virus-driven sell-off in equity markets will likely drive gold demand over the short term,” said Stephen Innes, chief market strategist at AxiCorp Financial Services Pty.
 “The more rapid pace of contagion will represent another significant headwind to global growth, bullish for gold.” He said
The Dow Jones Industrial Index, the world’s financial barometer has fallen sharply since news of the virus spread and if further panic sets in we may see gold head towards a level not seen in around 40 years.
"There are a lot of things that could go wrong for the stock market and the economic impact of a China slowdown from the coronavirus could be felt globally," said David Beahm, president and CEO of Blanchard & Company.
"This year will be another one of double digit percentage growth for gold. It could hit new all-time highs and top $2,000 Beahm said.


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