Gold Futures Settle Notably Higher Again

Gold prices climbed higher on Wednesday, extending gains to a fifth successive session, despite riskier assets such as equities gaining ground.

Although reports say the number of new coronavirus cases fell for a second straight day on Tuesday, concerns about the economic impact of the virus outbreak continued to prompt investors to seek the safe-haven asset.

Stronger than expected U.S. housing data limited gold’s gains.

The dollar index rose to 99.71 and was last seen at 99.69, up 0.25% from previous close.

Gold futures for April ended up $8.20, or about 0.5%, at $1,611.80 an ounce, a fresh high since end March 2013.

Silver futures for March ended up $0.167 at $18.311 an ounce, while Copper futures for March settled at $2.6060 per pound, gaining $0.0020 for the session.

A report from the International Monetary Fund said the global economy is set for a fragile and shallow recovery and the coronavirus outbreak in China is posing a new threat to the outlook.

“Global growth appears to be bottoming out, but the projected recovery is fragile,” the lender said in a surveillance note for the G20 finance ministers and central bank governors meeting to be held in the Saudi Arabian capital of Riyadh on February 22-23.

“The projected recovery is expected to be shallow and subject to downside risks,” the note said.

The IMF Managing Director Kristalina Georgieva said in a blog, “The global economy is far from solid ground…The truth is that uncertainty is becoming the new normal.”

A report released by the Commerce Department on Wednesday showed housing starts slumped by 3.6% to an annual rate of 1.567 million in January after soaring by 17.7% to a revised rate of 1.626 million in December.

Economists had expected housing starts to tumble by 11.4% to a rate of 1.425 million from the 1.608 million originally reported for the previous month.

Meanwhile, the report said building permits spiked by 9.2% to an annual rate of 1.551 million in January after sliding by 3.7% to a revised rate of 1.420 million in December.

Data from the Labor Department showed that its producer price index for final demand climbed by 0.5% in January after rising by 0.2% in December. Economists had expected producer prices to inch up by 0.1%.

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