Gold price closes in on 7-year high
Mining News Pro - The gold price jumped to fresh near 7-year highs on Monday as worries about the spread of the coronavirus spurred investors to seek safe haven assets and global stock markets plummeted.
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According to Mining News Pro - February gold futures, the most active contract with nearly 40m ounces traded on the day, was set to close above $1,580 an ounce on the Comex market in New York.

It would be the highest closing price since 9 April 2013 although on an intra-day basis gold briefly traded above $1,600 an ounce a fortnight ago when investors also sought less risky investments following the killing of an Iranian general in a US drone strike.

Bloomberg reports as concerns about the impact of coronavirus mount, holdings in exchange-traded funds backed by physical gold climbed to within 25 tonnes of the record set in November.

Gold ETFs and similar products had $19.2 billion or 400 tonnes of net inflows in 2019 after holdings rebounded in December, according to World Gold Council data. In the fourth quarter, ETF holdings reached an all-time high of 2,900 tonnes.

The new strain of the coronavirus, which originated in Wuhan in central China, has infected almost 3,000 people and killed 82, prompting Beijing to extend new year holidays to February 2nd.

 

Gold still cheap relative to stocks

Even after today’s sharp correction in US equities on a historical basis, gold is still a cheap asset to own.

Today, you need just over two ounces to buy the market. The ratio of the gold price and the S&P index of the 500 largest stocks in the US was the same in September 2007 when an ounce of gold could be picked up for less than $600.



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