Gold prices pop to roughly 6-year peak as China virus fears fuel market unease

Silver prices are around their highest in weeks.

Gold prices on Monday headed to a more than six-year high, as fears of the economic impact of a fast-moving viral outbreak hurt appetite for stocks and powered buying in assets perceived as havens.

“The anticipated Wuhan flu contagion triggered sell-off in equity markets will likely drive gold demand out of the gates today, and long-term strategic buyers could compound the move higher as they start to position for the “Wu-flu” to spread at a faster pace in the coming weeks,” wrote independent trader Stephen Innes, in a daily research note.

The coronavirus, which reportedly originated in Wuhan City, China, has infected nearly 3,000 people and killed at least 80, prompting Beijing to extend the annual Lunar New Year holiday by two days to Feb. 2 to contain the disease, according to reports.

In the U.S., the number of domestic cases hit five, according to Centers for Disease Control and Prevention.

Gold for February delivery GCG20, +0.60%  on Comex gained $10.30, or 0.7%, at $1,582.20 an ounce, and had hit an intraday high at $1,588.40, after putting in a weekly gain of 0.7% on Friday.

Gains for bullion are putting the precious metal on track to top its highest closing level since 2013, according to FactSet data.

Stocks are under pressure, supporting gains precious metals and bond prices, with the 10-year Treasury note TMUBMUSD10Y, -4.85%  yield, that moves in the opposite direction of prices, down at 1.62% from 1.68% late Friday.

Futures for the Dow Jones Industrial Average YMH20, -1.44% DJIA, -1.58% and the S&P 500 index ESH20, -1.48%SPX, -1.58% on Monday were indicating a sharply lower open at the start of the session.

March silver prices SIH20, +0.51% were up 13 cents, or 0.7%, at $18.25 an ounce, putting the commodity on pace for its highest close in about three weeks.

SOURCE: MARKETWATCH