By Barani Krishan
Investing.com – Gold hit two-week lows on Wednesday before rebounding as investors continued to monitor China’s coronavirus crisis closely after the World Health Organization downplayed media reports about vaccine breakthroughs, which initially got markets excited.
Gold futures for April delivery on New York’s COMEX settled up $7.30, or 0.5%, at $1,562.80 per ounce. It earlier slumped to $1,551.25, its lowest level since Jan. 22
In Tuesday’s trade, April gold fell 1.7% for its sharpest one-day loss in two months after China’s central bank provided its domestic money market with stimulus aimed at shielding the world’s second-largest economy from further damage caused by the viral outbreak.
Gold prices reached nearly $1,600 an ounce earlier this week as investors piled into the yellow metal as a hedge against the weakness in global markets.
Spot gold, which tracks live trades in bullion, was up $4.96, or 0.3%, at $1,557.22 by 3:15 PM ET (20:15 GMT). It sunk to a two-week low of $1,562.29 earlier, extending Tuesday’s bearish mood that caused a 1.4% loss.
Wednesday’s rebound in gold came despite a rally in global equities that sent Wall Street’s tech-heavy Nasdaq index to record highs for a second day in a row.
Gold prices initially tumbled after China's Changjiang Daily newspaper reported that a team of researchers led by Zhejiang University Professor Li Lanjuan had found that drugs Abidol and Darunavir can inhibit the virus.
Separately, Sky News reported that a British scientist has made a significant breakthrough in the race for a vaccine by reducing part of the normal development time from two to three years to only 14 days.
The World Health Organization, however, played down media reports of such “breakthrough” drugs being discovered to treat people infected with the new virus, which has claimed about 500 lives so far in China and has spread to at least 20 other countries.
Market participants said some investors were also hedging in gold ahead of the U.S. jobs report for January, due on Friday, on the possibility the report could turn out to be less bullish than thought.
Private employers added 291,000 jobs in January, soaring past economists' expectations for the best monthly gain in more than five years, according to the latest ADP National Employment Report.