By Alex Ho & Yaniv Elbaz
Investing.com - Gold prices jumped on Monday in Asia amid lingering fears surrounding the global Coronavirus outbreak and hopes of a rate cut the U.S. Fed.
Gold Futures for April delivery gained 2.82% to $1,610.90 by 5:45 AM ET (10:45 GMT). The gains of the safe-haven metal came even after Asian equities rebounded today, with Chinese stocks up more than 4%.
However, the latest PMI figure in China showed manufacturing activities in February contracted at the fastest pace ever, raising fears of a global recession from coronavirus.
Meanwhile, expectations of a rate cut by the U.S. Federal Reserve were also cited as pushing gold higher. Last Friday, Fed chief Jerome Powell issued a rare statement of reassurance by saying that the central bank will use “our tools" to support the economy, a strong signal of a coming interest rate cut.
Lower interest rates boost non-yielding asset classes like gold.
"Gold has been shining brightly as Investors seek out the safe haven asset, and price forecast also seems bullish," said Vinod Nair, Head of Research at Geojit Financial Services. Goldman Sachs (NYSE:GS) Group Inc. has boosted its 12-month gold forecast to $1,800 an ounce.