Gold Climbs After WHO Chief’s ‘Tip of the Iceberg’ Warning

Gold Climbs After WHO Chief’s ‘Tip of the Iceberg’ Warning

(Bloomberg) — Gold climbed for a fourth day as the coronavirus crisis continued to unfold and the World Health Organization issued a stark warning about the potential for more cases beyond China.

The death toll from the outbreak topped 900 and WHO Director-General Tedros Adhanom Ghebreyesus voiced concern over the spread from people with no travel history to China. “We may only be seeing the tip of the iceberg,” he said.

England reported four more cases, warning of an imminent threat to public health. That followed news the disease is spreading in the key Asian trading hub of Singapore.

Gold is trading near the highest since 2013 as investors assess the impact of the disease on global growth and appetite for risk, although concerns over weaker physical demand for gold in China are capping gains.

Read more: U.K. Reports Four More Cases; Death Toll Hits 910: Virus Update

The effects of the virus have presented a “new risk” to the outlook, according to the Federal Reserve, and the issue will probably be front and center when Chairman Jerome Powell kicks off two days of Congressional testimony on Tuesday.

“All the way through, gold has received good support, and the fact that we’re once again seeing it bubble upward does suggest those concerns are increasing,” said Michael McCarthy, chief market strategist at CMC Markets.

Spot gold added 0.2% to $1,572.89 at 11:01 a.m. in London as stocks slipped and the dollar turned lower versus a basket of its major peers following three days of gains.

Money managers have decreased their bullish gold bets, with net-long positions falling to the lowest level since December, weekly CFTC data on futures and options show. Still, the unfolding health emergency has seen holdings in global exchange-traded funds backed by bullion expand to a record.

“There’s a lot of capacity still for investors to buy gold this year,” Benjamin Jones, senior multiasset strategist at State Street, said in a Bloomberg TV interview. Gold holdings in ETFs are still relatively low compared with peaks eight years ago as a proportion of total ETF assets, he said.

Other precious metals also advanced, with spot palladium adding 1.7%.

–With assistance from Elena Mazneva.

To contact the reporter on this story: Ranjeetha Pakiam in Singapore at rpakiam@bloomberg.net

To contact the editors responsible for this story: Phoebe Sedgman at psedgman2@bloomberg.net, Liezel Hill, Lynn Thomasson

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