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Gold falls to a week low, but heads for its third monthly gain as the virus worsens

UNITED STATES (OBSERVATORY NEWS) — Gold fell more than one percent to its lowest level in a week on Friday, as recent price increases spurred investors to sell for profit, but it is still on its way to achieving a third consecutive monthly gain in light of the rapid spread of the Coronavirus.

And gold fell in the spot transactions one percent to 1623.51 dollars an ounce (ounce) by 1424 GMT, after a large increase of 1.3 percent in the previous session. And US futures fell 1.1 percent to $ 1625 an ounce.

“There is little profit taking in gold,” said Xiaofu, an analyst with Bank of China International, adding that she was not surprised “seeing some correction from time to time especially when you have overbuilding centers.”

Gold added about two percent so far since the beginning of the month, after reaching its highest level in seven years at 1688.66 earlier this week in light of the panic in the markets because of the Coronavirus.

“The market takes into account three cuts (in US interest rates) by the end of this year, more than one (expected) previously,” said Fu. So sentiment has shifted and with American yields declining, it is only natural that we see substantial support for gold prices.”

Fear of the virus drove global stock markets to a new slump on Friday, compounding poor performance in the worst week in a week since the 2008 global financial crisis.

Other precious metals also declined, as palladium fell 7.1 percent to $ 2,642.24 an ounce.

Palladium jumped to a record low of $ 2875.50 on Thursday, supported by continued supply shortages.

The metal used in car exhaust systems is on track to increase for the seventh consecutive month.

Platinum fell 3.7 percent to $ 865.35 an ounce, and is heading towards its worst weekly performance since 2010.

Silver fell 3.5 percent to $ 17.08 an ounce, and was on track for the worst monthly performance in three months.

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