Gold inches lower as firmer dollar offsets virus fears

Spot gold fell 0.1% to $1,579.38 per ounce by 0456 GMT, after hitting a near three-week peak on Monday. U.S. gold futures edged higher by 0.1% to $1,578.10.

Reuters

January 28, 2020 / 11:53 IST

A rally in gold prices came to a halt on Tuesday as a stronger dollar outweighed rising concerns over a new coronavirus that has fuelled demand for safe-haven assets.

Spot gold fell 0.1% to $1,579.38 per ounce by 0456 GMT, after hitting a near three-week peak on Monday. U.S. gold futures edged higher by 0.1% to $1,578.10.

Gold prices rose for the past four sessions as the spread of the coronavirus rattled financial markets and prompted authorities to impose travel restrictions and extend the Lunar New Year holidays.

Increasing fears about the economic impact of the new coronavirus is underpinning gold at these $1,580 an ounce levels, said John Sharma, an economist at National Australia Bank (NAB).

"(Gold) could reach $1,600, but would be more around the $1,570-$1,590 levels as we need to get more information, there are a lot of unknown variables around the virus," he said.

COVID-19 Vaccine

Frequently Asked Questions

How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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