Gold Bullion Reaches Six Year High as Fears of the Coronavirus Spread

Throughout the week, gold bullion prices, stock prices, oil prices, you name it, have all been sent on a roller-coaster of a ride, heading higher, then lower as the news about the spreading Wuhan coronavirus continues to dominate the headlines.

However, one thing is for certain, the coronavirus is not contained in any way, shape or form, as we continue to be bombarded with daily reports of new cases of the virus appearing in more and more countries around the world.

This has led the World Health Organization (WHO) to publicly declare that the coronavirus, which started in Wuhan China, to be a public health concern of international concern, aka, a global emergency that must be taken very seriously.

As per the WHO press release, detailing their announcement;

"It is expected that further international exportation of cases may appear in any country. Thus, all countries should be prepared for containment, including active surveillance, early detection, isolation and case management, contact tracing and prevention of onward spread of 2019-nCoVinfection, and to share full data with WHO."

Indeed, it does appear that the virus is spreading, as new reports in Russia, the United States, Canada and nineteen other countries, have all included new cases of the coronavirus appearing, including the first human to human transmission of the virus outside of China, which occurred within the United States.

In Russia, measures were taken, including the containment of over 6000 cruise ship passengers, which were not allowed to depart their ship and were forced to remain on board, fearing that the passengers could be infected with the virus.

Additionally, numerous airlines in various countries around the globe have decided to cease all flights directly into and out of China, including such airlines as Air Canada, United Airlines, British Airways, Delta, Air India and many others, of which the full list can be found here.

This has taken a heavy toll on the financial markets as new, news about the virus's spread seemingly appears to be occurring on a minute to minute basis, enrapturing people around the world, many of which should have little to fear about the virus if they are in good health, according to health authorities.

(Chart source, goldprice.org)

On the back of this news, gold bullion has experienced a sharp increase in price throughout the trading sessions of the week, with only one minor setback occurring during Tuesdays trading session.

This has resulted in gold reaching levels that have not been seen since 2013, gaining back much of what was lost from its previous all time high.

Now that the $1590 level is well within sight, the next strong resistance level should come at $1600, of which may be promptly broken if fears of the coronavirus continue to spread and people continue to seek the protection of safe haven assets, such as gold bullion.

(Chart source, oilprice.com)

This increase in gold bullion prices comes at a time when oil prices across the board are down, with WTI Crude and both Brent Crude suffering significant losses throughout the week, attempting to recover, only to drop lower again.

(Chart source, oilprice.com)

As of today, the death toll from the coronavirus has been sharply revised, with the virus now reportedly claiming 219 lives, all of which hail from China, where the virus is now spreading across the country.

Additionally, there are 9900 officially reported cases of the virus within China and 130 cases from twenty-two other countries, however, it is widely speculated that this number is low and the true amount is likely much higher, with many more cases set to appear in the coming days, weeks and months.

The United States has issued a level 4 travel advisory, which is their highest level and is a "do not travel" warning.

As per by the US Department of State;

"Do not travel to China due to the novel coronavirus first identified in Wuhan, China. On January 30, the World Health Organization determined the rapidly spreading outbreak constitutes a Public Health Emergency of International Concern. Travelers should be prepared for travel restrictions to be put into effect with little or no advance notice. Commercial carriers have reduced or suspended routes to and from China.

Those currently in China should consider departing using commercial means. The Department of State has requested that all non-essential U.S. government personnel defer travel to China in light of the novel coronavirus."

Hopefully in the coming days, the threat of the coronavirus spreading will wane, as monumental efforts are now being made in stopping it from spreading and becoming a global epidemic, however, this is yet to be truly determined if it is even possible.

For the time being, expect that the news headlines are going to continue to be dominated by reports about the spread of the coronavirus, leading to increased uncertainty and volatility in the financial sector across the board, including both gold and silver bullion.

- As first seen on the Sprott Money Blog