Daily Management Review

Gold prices show maximum weekly growth since 2016


Gold prices are about to end the week with maximum growth since February 2016 due to investors' concerns about the economic consequences of the outbreak of coronavirus, Reuters writes.

Gold, traditionally regarded as a defensive asset, rose more than 5% this week.

"We are witnessing a gradual transition from stocks to gold as a result of a worsening macroeconomic background, and this is what gold will continue to observe in the foreseeable future," said ANZ analyst Daniel Hines.

"The deterioration in the spread of COVID-19 has raised market expectations that central banks will continue to cut rates in order to stabilize market confidence and provide some support," the analyst said.

The coronavirus panic previously caused risk aversion, bringing down global equity markets.

On Tuesday, the US Federal Reserve announced an emergency rate cut of 50 basis points to 1-1.25% to support the economy amid a virus outbreak.

source: reuters.com