Gold gains on global growth fears as WHO declares pandemic

Spot gold rose 0.6% to $1,645.00 per ounce by 0033 GMT

Image used for illustrative purpose. An employee of a bullion house shows gold bars in Mumbai .

Image used for illustrative purpose. An employee of a bullion house shows gold bars in Mumbai .

REUTERS/Arko Datta

Gold rose on Thursday as concerns about the economic impact from the coronavirus increased after world health officials declared it a pandemic and many countries took measures to combat the spread by restricting public gatherings.

Spot gold rose 0.6% to $1,645.00 per ounce by 0033 GMT. U.S. gold futures was up 0.1% at $1,644.30.

The World Health Organization (WHO) on Wednesday described the new coronavirus as a pandemic, adding that Italy and Iran were now on the frontline of the disease and other countries would soon join them.

Global shares were set for a rocky ride on Thursday as investors tally the economic damage of the virus, a day after the WHO's announcement that pushed the U.S. Dow Jones industrials into the bear market territory.

The virus is forcing Italy to tighten its nationwide lockdown by shutting bars, hairdressers and restaurants as other countries closed schools and cancelled sports events and other big gatherings.

The European Central Bank is all but certain to unveil new stimulus measures on Thursday, pushing policy closer to its limits to help the euro zone economy cope with the outbreak. 

The Bank of England slashed interest rates on Wednesday and announced support for bank lending just hours before the unveiling of a budget splurge designed to stave off a recession triggered by the outbreak.

British Prime Minister Boris Johnson will chair an emergency meeting on Thursday at which he is expected to approve moving to the "delay phase" of the virus response that includes more stringent measures to counter the outbreak.

The Trump administration wants to ease the economic drag from the virus with aid to workers and businesses that will pump hundreds of billions of dollars into the economy, U.S. Treasury Secretary told lawmakers on Wednesday.

The London Bullion Market Association (LBMA) on Wednesday said gold trading volume hit daily high of $100 billion on Monday.

SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings fell 0.91% to 953.26 tonnes on Wednesday.

Palladium fell 0.8% to $2,285.87 per ounce, while platinum slipped 0.2% to $858.63.

Silver gained 0.6% to $16.85 per ounce.

1230  U.S. Initial Jobless Claims (Weekly)
1245  EU ECB Refinancing, Deposit Rate (March)
1230  EU Press conference following the Governing Council meeting of the ECB in Frankfurt
1330  EU ECB President Christine Lagarde speaks at a press conference on the outcome of the Governing Council meeting

(Reporting by K. Sathya Narayanan in Bengaluru; editing by Uttaresh.V)

© Reuters News 2020

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