By Noreen Burke
Investing.com -- Gold prices rose to fresh seven-year highs on Thursday amid concerns over the spread of the coronavirus beyond China even as Beijing implemented fresh monetary stimulus measures aimed at offsetting the economic impact of the epidemic.
U.S. gold futures were trading at $1,620.75 as of 7:47 AM ET (1247 GMT), a level not seen since March 2013.
Spot gold, which tracks live trades in bullion, was at $1,617.45 per ounce.
China announced a steep drop in the number of new cases of the virus overnight and the country’s central bank cut its benchmark lending interest rate in a bid to support the economy, which is expected to be badly hit by the virus.
The world's second-largest economy is likely to roll out more support measures, analysts said.
But South Korea recorded an increase in new cases, Japan reported two deaths and new research indicated the virus may be more contagious than previously believed.
Wednesday’s minutes from the U.S. Federal Reserve's January policy meeting showed policymakers were cautiously optimistic about their ability to hold interest rates steady this year, even as they acknowledged new risks caused by the virus outbreak.
Gold’s gains came despite a broadly stronger U.S. dollar. Against a basket of currencies, the greenback rose to its highest level since May 2017, while the steep decline in the yen has raised doubts over its status as a safe haven asset, at least temporarily. Gold is benefiting from that change in perception.
The dollar has surged more than 2% against the yen this week, reaching its highest in almost 10 months. The yen has been pressured lower by concerns over the growing number of coronavirus cases in Japan, against the background of a slowing economy.
A strong dollar tends to make dollar denominated commodities such as gold more expensive for buyers holding other currencies.
Meanwhile, palladium futures rose 1.6% to $2,613.8 an ounce, having touched a record high of $2,841.54 in the previous session.
Silver was steady at $18.32, just below its highest level in more than a month hit on Wednesday, while platinum was off 0.3% to $1,001.2.
--Reuters contributed to this report