By Geoffrey Smith
Investing.com -- Gold prices rose again on Friday as risk aversion surged in reaction to the ever-more visible spread of the coronavirus and its rising impact on global economic activity.
Russia, Italy and the U.K. all confirmed their first cases, while Delta Air Lines (NYSE:DAL) joined a growing list of airlines curtailing flights into and out of China, suspending its services through the end of April. American Airlines (NASDAQ:AAL) also announced the suspension of China flights. The actions all came on the heels of the the World Health Organization's decision to declare the outbreak a cause for global concern on Thursday, having previously seen the risks as contained to China.
Meanwhile, central and local government actions to stop the spread of the virus mean that at least two-thirds of China’s factories will remain idle for another week.
All in all, Goldman Sachs (NYSE:GS) analysts estimated, the outbreak could result in China’s economy growing by as little as 5.5% this year, a sharp drop from last year’s 6.1% that was itself the country’s slowest annual growth in 30 years.
By 11:15 AM ET (1615 GMT), gold futures for delivery on the Comex exchange were up 0.3% at $1,587.60 a troy ounce, while spot gold was up by an even clearer 0.9% at $1,587.92 an ounce.
Silver futures were up 0.3% at $18.05.
However, the clearest sign of nascent panic with regard to the world economic outlook was in copper futures, which extended their losing streak to 13 sessions as they briefly dipped below $2.51 a pound. That’s only 3 cents off the three-year low that they hit in August at the depths of the U.S.-China trade war.
While there was little in the U.S. data to strengthen the bull case for gold on Friday, figures out of the euro zone earlier showed the weakest growth since 2014 in the final quarter of last year, something that could complicate any move by the European Central Bank away from a negative interest rate policy that is squeezing the life out of eurozone banks. National data showed the French and Italian economies both surprisingly contracting in the fourth quarter, while better-than-expected data out of Spain ensured a 0.1% increase in overall output.
Elsewhere, platinum group metals were mixed, with platinum futures falling 1.8% to a three-week low of $963.30 an ounce, while palladium futures found a bid again, rising 1.0% to $2,236.90.