Palladium tumbles 28%, gold slumps over 4% in virus-led rout
By Brijesh Patel (Reuters) - Palladium plunged as much as 28% on Thursday as panic selling driven by intensifying fears over the coronavirus pandemic seeped into precious metals, with gold slumping more than 4% as investors rushed to cover margin calls in other assets. Platinum plummeted nearly 13% and silver shed over 7% earlier in the session. 'It is a rush to cash and a mild panic-type move
By Brijesh Patel
(Reuters) - Palladium plunged as much as 28% on Thursday as panic selling driven by intensifying fears over the coronavirus pandemic seeped into precious metals, with gold slumping more than 4% as investors rushed to cover margin calls in other assets.
Platinum plummeted nearly 13% and silver shed over 7% earlier in the session.
"It is a rush to cash and a mild panic-type move. What we're seeing is market participants and investors indiscriminately selling every asset class," said David Meger, director of metals trading at High Ridge Futures.
"People are selling gold and silver positions to finance equity positions or other situations."
Global stocks plunged below bear market thresholds and oil slid 8% after U.S. President Donald Trump banned travel from Europe to stem the spread of coronavirus, threatening more disruption to the world economy.
Auto-catalyst metal palladium
"Apart from the overall drop across precious metals, palladium's move was exacerbated by news earlier this week of a breakthrough in catalytic converter technology, allowing for less use of the metal, which had damaged overall sentiment," said Tai Wong, head of base and precious metals derivatives trading at BMO.
The metal has shed more than 35% since hitting an all-time high of $2,875.50 on Feb. 27, as demand concerns begin to overshadow a sharp supply shortfall.
Bullion has erased gains from a surge past the $1,700 per ounce level for the first time since late 2012 on Monday, when investors made a beeline for safe havens amid the rapid spread of the virus.
"The Covid-19 pandemic has the global marketplace in panic. 'When in doubt, get out' is the mantra today," Kitco Metals senior analyst Jim Wyckoff said in a note.
Global central banks have taken steps to help economies to cope with the growing cost of the coronavirus. The U.S. Federal Reserve reduced rates in an emergency move last week.
"We might see extreme volatility for 1-2 more weeks until, hopefully, we get a better handle on the outbreak in Europe and U.S.," BMO's Wong said.
Further denting metals, the dollar <.DXY> jumped 1%.
(Reporting by Brijesh Patel and Arpan Varghese in Bengaluru; Additional reporting by Swati Verma; Editing by Dan Grebler and Marguerita Choy)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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