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Jan. 22, 2020, 1:50 p.m. EST

Gold finishes lower as worries over China virus ebb

Palladium prices outperform rival precious metals, up 20% so far this year

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By Myra P. Saefong and William Watts, MarketWatch


AFP/Getty Images

Gold futures ended with a modest loss on Wednesday, lacking support as some equities markets in Asia and the U.S. climbed and while commodities traders weighed the potential economic impact of an outbreak of a serious virus in China.

“The financial markets no longer appear to be viewing the coronavirus in China with such grave concern…The Chinese authorities announced measures today that are intended to prevent the further spread of the virus. Apparently this has somewhat reassured the markets,” said Daniel Briesemann, analyst at Commerzbank, in a note.

Gold for February delivery /zigman2/quotes/210035396/delayed GCG20 +0.99%  on Comex lost $1.20, or 0.08%, to settle at $1,556.70 an ounce, while March silver /zigman2/quotes/210316162/delayed SIH20 +0.40%  added 2 cents, or 0.1%, to $17.828 an ounce following a 1.5% loss Tuesday.

U.S. benchmark stock indexes were trading higher on Wednesday as gold futures settled, joining a positive tone for many global equities markets and dulling demand for haven gold.

Major stock indexes had finished lower on Tuesday, pulling back from records seen last week, after a U.S. citizen who had recently returned from a trip to central China was diagnosed with the new virus that’s raised worries over a potential pandemic. However, recent updates from Chinese authorities had provided investors with some comfort the outbreak will be contained and a pandemic, which could slow economic growth, will be avoided.

”It would appear as if global anxiety has yet to reach a high enough level to attract safe haven buying of gold off the idea of a major economic/health related debacle,” analysts at Zaner Metals wrote in a daily note. “Therefore, it appeared as if the gold market initially adopted deflationary fear from the crisis.”

Read: China’s new coronavirus cases rise sharply to 400, as death toll rises to 9

Also see: Why the mysterious coronavirus from China has spread so quickly

President Donald Trump on Wednesday said he had been briefed by the Centers for Disease Control and Prevention and that the U.S. had nothing to fear from the virus outbreak. “It’s one person coming in from China. We have it under control. It’s going to be just fine,” he told CNBC in Davos, Switzerland.

In other metals trading, March palladium /zigman2/quotes/210239659/delayed PAH20 -2.63%  rose 4.6% to $2,335.60 an ounce, with futures prices for the metal up more than 20% so far this year and continuing to score record settlements.

Read: Why palladium prices keep hitting new highs and rhodium has already rallied by over 40% this year

“We are very surprised that the palladium market has been able to continue to rally in the face of the threat against the Chinese economy, as that would seem to reduce the growth rate of demand from catalytic converters in new vehicles,” said analysts at Zaner Metals.

Meanwhile, April platinum /zigman2/quotes/210262726/delayed PLJ20 -0.95%  added 1.4% to $1,021.30 an ounce. March copper /zigman2/quotes/210055491/delayed HGH20 -1.42%  shed 1% to $2.765 a pound.

/zigman2/quotes/210035396/delayed
US : U.S.: Nymex
$ 1,660.80
+16.20 +0.99%
Volume: 434.00
Feb. 24, 2020 4:12p
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/zigman2/quotes/210316162/delayed
US : U.S.: Nymex
$ 18.61
+0.08 +0.40%
Volume: 138,064
Feb. 24, 2020 4:50p
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/zigman2/quotes/210239659/delayed
US : U.S.: Nymex
$ 2,537.00
-68.40 -2.63%
Volume: 5,043
Feb. 24, 2020 4:50p
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/zigman2/quotes/210262726/delayed
US : U.S.: Nymex
$ 966.80
-9.30 -0.95%
Volume: 24,380
Feb. 24, 2020 4:50p
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/zigman2/quotes/210055491/delayed
US : U.S.: Nymex
$ 2.57
-0.04 -1.42%
Volume: 96,805
Feb. 24, 2020 4:50p
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Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong. William Watts is MarketWatch's deputy markets editor, based in New York. Follow him on Twitter @wlwatts.

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