Oil and gold prices move in opposite directions as coronavirus fears intensify

Oil prices fell by 4% on Monday following news of coronavirus outbreaks in several countries outside of China, while investors flocking to gold pushed prices for the safe haven metal up to eight-year highs.

Global trading markets were ravaged yesterday after reports of fresh infections and coronavirus-related deaths in Italy, South Korea and Iran. Major indices in Europe, North America and Asia closed in the red.

The so-called ‘corona-crash’ pushed Brent crude down by 4.1%, to US$56.09 per barrel and US crude futures also fell by 4% to $51.26.

“Oil prices will remain vulnerable here as energy traders were not pricing in the coronavirus becoming a pandemic,” said Edward Moya, senior market analyst at OANDA.

“While some parts of China are seeing improving statistics with the coronavirus, financial markets will remain on edge until we start seeing the situation improve in Iran, Italy, South Korea and Japan,” he added.

Meanwhile, gold rose by as much as 2.8% on Monday to its highest since January 2013 at $1,688.66 per ounce, as fears of the outbreak inducing a global economic slowdown gripped capital markets.