(Updates prices)
* Crude prices near two-decade low
* Platinum hits over two-week low, silver drops to two-week
low
* Interactive graphic tracking the global coronavirus
spread: open
https://tmsnrt.rs/3aIRuz7 in an external browser
By Eileen Soreng
April 21 (Reuters) - Gold prices dropped nearly 2% to a near
two-week low on Tuesday, while palladium slumped 15.5% as
investors scuttled for cash to cover losses in other asset
classes mainly driven by a crash in oil markets as the
coronavirus wrecks economies.
Spot gold XAU= slipped 1.3% to $1,671.68 per ounce at 1:33
p.m. EDT (1733 GMT), having earlier hit a low since April 9 at
$1,659.68. U.S. gold futures GCcv1 settled 1.4% lower at
$1,687.80.
Palladium XPD= fell 9.5% to $1,958.00, having earlier
fallen to $1,827.92. Platinum XPT= was down 3.3% to $745.29
and silver XAG= dipped 4.3% to $14.71.
"Oil has really got the entire commodity complex down with
it ... A lot of people are exiting positions that they were very
profitable on with a wait-and-see attitude to see whether
there's further spillover from the energy into precious metals,"
said Bob Haberkorn, senior market strategist at RJO Futures.
Brent crude futures plunged 25% to the lowest in nearly two
decades, a day after panicked traders sent U.S. oil below minus
$40 per barrel on fears of a historic glut due to demand
destruction by the coronavirus pandemic. O/R
The nosedive in U.S. crude prices and dismal corporate
earnings reports ignited fears over lasting damage to the global
economy from the pandemic, sending global stocks lower.
MKTS/GLOB
Bullion has on occasion moved in tandem with equities
recently, especially as sharp sell-offs in wider markets force
investors to sell precious metals to meet margins calls and
cover their losses.
"The historic collapse in oil prices and rising fears over a
severe global recession may create another dash for cash,
essentially exposing gold prices to downside shocks as the
dollar appreciates," said FXTM analyst Lukman Otunuga.
"Although the unfavourable global macroeconomic conditions,
chaos surrounding the coronavirus outbreak and gloomy outlook
for oil markets could accelerate the flight to safety, gold may
not be the first destination of safety for investors."
Gold, considered a safe store of value during political and
financial uncertainty, has been facing tough competition from
another safe-haven, the dollar, in which it is priced. A
stronger dollar makes gold expensive for holders of other
currencies. USD/
However, a wave of stimulus measures by central banks to
ease economic damage from the new coronavirus pandemic and
inflows into exchange traded funds (ETF) are likely to keep gold
supported, analysts said. Holdings in the SPDR Gold Trust GLD , the world's largest
gold-backed ETF, are now at their highest in over three years.
GOL/ETF
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GRAPHIC-Gold's YTD performance versus other asset classes https://reut.rs/2xQL963
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