Gold prices slipped for the second day in a row on Friday in Asia despite a continued meltdown in global stocks.
Gold Futures for April delivery slipped 0.1% to $1,640.70 by 12:40 AM ET (04:40 GMT).
Gold prices gave up some of its earlier gains this week as traders booked profit as the yellow metal traded a seven-year high.
Despite the pause, many expect the yellow metal to regain the steam that took it to seven-year highs of nearly $1,700 an ounce shortly.
“Gold will be bolstered by pandemic fears, central bank and government stimulus, trade angst, and political uncertainty,” Ed Moya, analyst at New York’s OANDA, said in a note.
“Gold will eye the $1,700 an ounce level over the next couple weeks as the coronavirus outbreak worsens.”
Asian markets traded sharply lower today, with Japanese and Chinese stocks plunging more than 4%. The World Health Organization said Thursday that the coronavirus outbreak has the potential to become a pandemic and is at a decisive stage.
Stocks in the U.S. also lost about 3% each overnight, tumbling for a sixth-straight day after California’s governor Gavin Newsom said the state is monitoring 8,400 people for signs of exposure.
Meanwhile, traders are paying close attention to Federal Reserve’s next month. Some believe the central bank might be forced into releasing more easing policies, including cutting rates, to protect the U.S. economy from the effects of the coronavirus.
The Fed just ended an easing cycle in December after cutting rates back-to-back in three months.