Gold dives, palladium heads for record weekly decline
March 13 (Reuters) - Gold tumbled as much as 4.5% on Friday, headed for its biggest weekly loss since 1983 as investors embarked on a selling spree to hoard cash and meet margin calls across other markets which have been battered by the impact of the coronavirus outbreak.
Palladium slid nearly 11%, a day after a 28% plunge, headed for its biggest weekly percentage decline on record.
Spot gold slid 4% to $1,513.11 per ounce at 2:54 p.m. EDT (1854 GMT). For the week, it was down more than 9%, the most since 1983. U.S. gold futures settled down 4.6% at $1,516.70.
“While equity markets continue to be under pressure and there is a push towards liquidity across the markets, it wouldn’t be unusual for gold prices to sell off as well,” Standard Chartered Bank analyst Suki Cooper said. “In the near-term, gold could see further downside because of the need to meet margin calls across other markets and if investors are preferring to move to cash and reduce risk exposure across the board.”A sharp rebound on Wall Street largely fizzled out following reports that U.S. President Donald Trump will declare a national emergency over the pandemic.
Bullion has lost nearly $200 an ounce since hitting more than a seven-year high of $1,702.56 per ounce on Monday.
“Gold and equities have been positively correlated over the most recent days, but today the metal couldn’t really rally when stocks backed up, which is a troubling sign and indicates that spec longs are retreating to cash, the safest haven,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
Denting bullion’s safe-haven appeal, the dollar jumped 1.2%.
On the physical side, major Asian hubs saw activity dwindle due to the impact of the coronavirus outbreak, especially in the world’s biggest gold consumer, China.
Palladium tumbled 7% to $1,705.50 per ounce, and was headed for a weekly decline of about 34%.
“Palladium remains extremely volatile. The metal still has plenty of downside potential from a technical perspective. In addition, there has been more and more negative fundamental news for palladium of late,” Commerzbank analysts wrote in a note.
Platinum dropped 1.5% to $751.50, headed for its biggest weekly loss ever.
Silver fell 8.8% to $14.43, putting it on track for its biggest weekly decline since 2011.