Gold was not spared on Thursday's market rout, with gold futures on Comex falling by $52, or 3.2 percent, to settle at $1,590.30/oz.
A drop in the stock market typically raises the safe haven appeal of gold, but it is now the asset of choice among investors who want to raise cash, and a selloff on Thursday knocked back the yellow metal's sharp rally that began in December.
Gold traders are now selling «what they can amid a panicked marketplace,» said Kitco.com analyst Jim Wyckoff on Thursday in a roundup note.
«People are liquidating gold to cover margin calls they have in the equity market,» Albert Cheng, chief executive of the Singapore Bullion Market Association, told finews.asia, explaining the precious metal's sharp losses.
«Gold is an easily liquidable asset, which again shows its value as a safe haven asset in times like this,» Cheng said, noting similar behavior in the 1997 and 2008 financial crises.
Asia Stock Markets Hammered
Wall Street endured its worst session since 1987's «Black Friday» on Thursday, following the World Health Organization's declaration of the Covid-19 outbreak as a pandemic and U.S. President Donald Trump's address on Wednesday night, which has seemed to cause further unease about the situation, even as he assured the United States is «more prepared» to fight the pandemic than any other nation.
At the start of trading on Friday, Singapore's STI index fell 5 percent, the most at the opening bell since October 2008, «The Business Times» reported. Other stock markets also took large hits: Hong Kong's Hang Seng index fell 5.8 percent, and Shanghai's Composite Index fell 3.3 percent.
Australia’s S&P/ASX 200 benchmark fell 7.1 percent in its biggest decline since 2008, and is on track for its worst week on record, while New Zealand's S&P/NZX 50 index tumbled a record 7.4 percent. Japan's Nikkei 225 index fell 9.4 percent, and Korea's Kospi fell 7.6 percent.
