Gold prices were broadly higher on Monday, spiking more than 1 percent as traders favored the safe haven asset on concerns that the coronavirus was spreading globally and could cause additional production shutdowns and business slowdowns. Gold futures were up 2.362 percent to $1,603.70 per ounce as of 2:36 p.m. HK/SIN after surging more than 2.4 percent earlier in the session.
The safe-haven yen did not fare as well, with the currency falling 0.151 percent against the U.S. dollar. The dollar was trading at 108.23 against the yen, down significantly from peaks over 111 in mid-February, but still up 0.15 percent on the day.
Negative Data Abounds
A slew of negative data shook markets on Monday, including a report that Japanese auto sales slumped 10 percent in February due to production disruptions. Reports also indicated that Macao’s casino revenue fell 87.8 percent last month as compared to February 2019, a report likely to cause U.S. resort stocks to slide further during Monday’s New York trading session. Factory activity in China in February was lower than expected, and JPMorgan cut its 2020 growth forecasts to 5.2 percent from 5.4 percent on news that a return to work in Chinese factories has been slower than anticipated. Travel disruptions to China and Italy have also caused new reasons for concern, both in the way they impact airline and gasoline stocks, and in the way they impact international business.
Despite the News, Asian Stocks Head Higher
Despite this spate of negative data, Asian stocks headed higher on Monday, reversing the downtrend seen through most of last week as a global selloff erased more than $5 trillion from global share value and many stock indexes hit lows not seen in ten years.
Asian stocks were bolstered by optimism that global central banks were prepared to react to the global selloff, with optimism that the U.S. Federal Reserve, the Bank of Japan, and the Reserve Bank of Australia would cut interest rates in the near term. BOJ Governor Haruhiko Kuroda commented on Monday that the central bank would take necessary steps to stabilize financial markets.
Japan’s Nikkei 225 gained 0.95 percent by Monday afternoon, while Hong Kong’s Hang Seng Index gained 0.82 percent and South Korea’s Kospi gained 0.89 percent despite a slew of new cases in the country. China’s benchmarks saw the steepest gains, with the Shanghai Composite up 3.45 percent and the Shenzhen Composite up 4.22 percent.