Gold and palladium put pedal to the metal as investors flee to safety on virus fears

By Ranjeetha Pakiam

(Bloomberg) – Gold traded near the highest level since 2013 on concerns over the spread of the new coronavirus and how it's impacting global growth. Palladium topped $2,700 an ounce as it continued its record-breaking rally.

Bullion steadied after surging 1.3% on Tuesday's as Apple's warning that the virus and efforts to contain it would have its sales missing forecasts spurred a sell-off in stocks. China's death toll from the disease topped 2,000, while the province at the centre of the outbreak reported fewer additional cases.

The flight to safety has benefited haven assets, with the rally spilling over to the palladium market, where a multi-year deficit is expected to widen in 2020.

Gold is up 5.6% this year as investors assess the impact of the disease on economic growth and appetite for risk amid speculation that the Federal Reserve will feel increased pressure to reduce interest rates. The US central bank has said the effects of the virus have presented a "new risk" to the outlook and traders will study minutes from the Fed's latest meeting, due later on Wednesday, for any hint of a dovish tone.