Safe-Haven Gold Prices Fall Despite Plunge in China’s Stock Markets

Prices of the safe-haven gold fell on Monday in Asia despite the plunge in the Chinese stock markets.

Gold Futures fell 0.2% to $1,584.15 by 1:30 AM ET (05:30 GMT).

The fall in prices came even after China’s Shanghai Composite and the Shenzhen Component plunged more than 8% earlier in the day, after the country’s National health Commission confirmed the death toll from the new virus rose to 361 as of Monday. Confirmed cases increased to 17,205, it said.

The crisis has brought the world’s second-largest economy to a virtual standstill, with Goldman Sachs revising down China's 2020 GDP growth expectations to 5.5% from 5.9%.

“Fear (is) creeping back in because despite that (WHO) proclamation that it should not interfere with travel and trade, the fact is, it already has,” Phil Flynn, senior energy analyst at the Price Futures Group in Chicago said. “The Coronavirus has spread from China to around 20 countries, killing more than 200 people.”

Last week, multiple countries began to impose travel bans on visitors who have been to China or certain parts of it. These bans contradicted with official advice from the World Health Organization (WHO), which said last week that it does not recommend and actually opposes any restrictions for travel and trade against China.

Despite the losses today, gold posted a 4% gain in January, its best monthly gain in five, amid safe-haven buying in the yellow metal.