Shares Fall On 2019-nCoV Economic Concerns, Gold Gains

Global equity markets on Friday, January 31, posted their biggest weekly and monthly loss on shares from August 2019 to January 2020.

This, as growing concerns about the economic impact of the 2019 novel coronavirus outbreak in China sapped risk appetite and raised the safe-haven Japanese yen and Swiss franc.

Shares Fall On 2019-nCoV Economic Concerns, Gold Gains | Photo from Reuters

Yields on US debt fell to almost five-month lows, while gold posted its best month in five. This, as the United States, Japan, and other countries secured travel curbs to China.

Since November 2018, Global crude benchmark Brent scored its biggest monthly decline. Economists strengthen their outlook for China, as travel curbs and supply chain disruptions may likely to compress Chinese growth.

According to Lou Brien, market strategist at DRW Trading in Chicago, the market will struggle “until you get some sort of clarity that the spread has subsided and is slowing or there’s a foolproof antidote to it.”

Tim Ghriskey, the chief investment strategist at Inverness Counsel in New York, said that the Chicago Purchasing Management Index was “very weak” as the Chicago PMI fell to a lower-than-expected 42.9, which was the lowest since December 2015. He added that the bond market was “trying to tell us something” as their bond yields went down.

Spot gold increased 0.87% at $1,587.5 per ounce, while the US gold futures were settled 0.1% lower at $1,587.90.

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