Gold Prices Fall on Profit Taking

By Alex Ho

Investing.com - Gold prices fell and snapped its 10-day rally on Wednesday in Asia as traders book profits even as global equities tanked due to coronavirus concerns.

Gold Futures for April delivery fell 0.2% to $1,646.75 by 1:45 AM ET (05:45 GMT).

Analysts attributed the decline in gold prices to profit taking, after the yellow metal hit a more-than seven-year high this week amid safe-haven demand as markets feared the coronavirus outbreak would rattle global markets.

"The rapid spread of coronavirus outside China and its possible negative global economic impact supports gold’s haven demand,” said Hareesh V, head of commodity at Geojit Financial Services, in a Live Mint report.

“Meanwhile, policy easing measures from various central banks to shore up the economy and moderate physical market activities are likely to limit major upside.”

TD Securities also noted that longs in the yellow metal had entered new territory of “dry-powder positioning”, which it said was “off the charts” and could trigger a market reversal.

Global equities slumped after U.S. health officials on Tuesday warned that they expect the epidemic to spread in the US.The U.S. Centers for Disease Control and Prevention said a spread of Covid-19 at home was "inevitable" and warned Americans to prepare for disruptions in their daily lives.

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