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Coronavirus market meltdown takes gold, silver, palladium and platinum down with it

Kitco News

(Kitco News) Markets are gripped with fear as another day of sell-off triggered a 15-minute “circuit breaker” for the second time this week. Precious metals are not much better off Thursday with gold, silver, platinum and palladium all tumbling down. 

The day was kicked off with another huge stock sell-off as the Dow and S&P 500 were already in bear market territory and last trading down 9.5% and 8.7%, respectively. 

The selling intensified after U.S. President Donald Trump failed to reassure markets’ concerns around an economic slowdown connected to the coronavirus outbreak. 

Trump announced on Wednesday evening that travel from 26 European countries that form the so-called Schengen Area will be suspended for 30 days starting at midnight Friday in an effort to slow the outbreak. The administration will also be providing financial aid for workers who have coronavirus or are caring for others.

“To keep new cases from entering our shores, we will be suspending all travel from Europe to the United States,” Trump said. 

Markets were confused and disappointed by Trump’s announcements, which triggered another day of major sell-off. 

“President Trump’s address to the nation last night was underwhelming. It shows that the U.S., like many other countries, is unable to provide the right action in response to the virus spread. He simply couldn’t come up with strong stimulus measures to ease fears of businesses and consumers. A much-needed payroll tax cut doesn’t seem to be on the cards in the short term, and measures to isolate the U.S. from Europe is only making the situation worse,” FXTM chief market strategist Hussein Sayed said on Thursday. 

Precious metals response

All precious metals were down Thursday. 

Gold plunged more than 4% on the day with April Comex futures last trading at $1,575.20.

Silver dropped nearly 6% on the day with May Comex futures last trading at $15.79.

Platinum was down more than 10% on the day with April futures last trading at $774.40.

Palladium was hit the worst on Thursday, down nearly 19% on the day with June futures last at $1,811.30.

Gold continued to be caught between being a safe-haven asset and investors needing to sell the yellow metal to offset losses elsewhere.

Analysts are not giving up on gold, remaining very optimistic long-term due to weaker global growth, monetary policy easing, and safe-have demand.

“We believe prices will likely continue to be caught in a tug of war between safe-haven flows and liquidity needs; but beyond the near term, an environment of record-low US Treasury yields, expectations of further Fed rate cuts, weak equity markets, dovish central bank action globally, and growing negative-yielding debt will likely continue to stoke demand for gold as a diversifier and a safe haven,” said Standard Chartered precious metals analysts Suki Cooper.

Latest major updates

  • Cases worldwide: More than 127,749. Global deaths: At least 4,717,

  • U.S. cases: More than 1,300. U.S. deaths: At least 38.

  • Top U.S. health official said Thursday that the system of processing coronavirus tests cannot do so quickly enough, which is a “failing.” “The system is not really geared to what we need right now, what you are asking for. That is a failing,” Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told the House Oversight and Reform Committee.

  • The NBA has suspended its season until further notice after Utah Jazz player tested positive for coronavirus.

  • Major League Soccer has suspended its season for 30 days due to the coronavirus outbreak.

  • Popular California music festival Coachella was postponed until October.  

  • Companies like Google and Twitter are asking employees to work from home.

Some key COVID-19 LIVE UPDATES to follow 

The New York Times
The Washington Post 
The Guardian

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