By Noreen Burke
Investing.com -- Gold prices rose on Thursday as cases of the coronavirus continued to spread around the world, adding to concerns over the economic impact of the epidemic and sending investors into safe haven assets.
By 08:21 AM ET (1321 GMT), gold futures for delivery on the Comex exchange were trading at $1,656.20 a troy ounce, up 0.8%. Spot gold was at $1,654.55, up 1.0%.
Cases of the coronavirus surged in the U.S. with the death toll rising to 11 and California declaring a state-wide emergency. Countries in Europe such as Germany, France and the U.K. all posted big jumps in confirmed cases.
"The virus is really taking over... I think the markets are a bit nervous, (gold is) more prone to higher prices and is well supported on the downside," said Afshin Nabavi, senior vice president at precious metals trader MKS SA.
"At the moment, it looks like it's going to have very negative effects on businesses, tourism, travel and smaller businesses. So I think the economy is going to be hurting big time."
The International Monetary Fund said on Wednesday the global spread had crushed hopes for stronger growth this year, while a Fed report showed there were signs the epidemic had begun to weigh on business sentiment in the United States.
Prices continue to be well supported by expectations of further interest rate cuts from the Federal Reserve and other central banks. Michael Metcalfe, global macro strategist with State Street (NYSE:STT) Global Advisors, said in emailed comments that "we can expect further aggressive easing from the Fed and even (quantitative easing)" if the cuts already announced don't stop the economy falling into recession.
Gold's relative attractiveness has also benefited from the crushing of nominal and real (i.e. inflation-adjusted) returns on government bonds, as money has flooded out of risk assets into havens. The yield on the 10-year U.S. Treasury bond fell clearly below 1% again on Thursday, trading down 4 basis points at 0.95%. Its German counterpart, meanwhile, traded down two basis points at -0.66%.
Silver futures ticked up to $17.33 an ounce while platinum futures were down 1.4% to $862.8. Copper futures were little changed at $2.585 a pound.
--Reuters contributed to this report