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JOHANNESBURG - Fears by the World Health Organisation (WHO) that the spread of the deadly coronavirus could accelerate outside China pushed the gold price higher yesterday, but it was too early to tell the impact of the virus on the demand for the precious metal, the World Gold Council said.

The bullish gold price and the heightening trade war between China-US last year sent investors fleeing to the traditional safe havens, such as the yen, bonds and gold.

A spokesperson for the World Gold Council, the authority which is responsible for stimulating gold demand, said only time would tell what the magnitude of the coronavirus would be on the demand for gold.

“It’s way too early to understand the potential impact the coronavirus might have as it seems we are still in what may be the early stages of the outbreak,” the World Gold Council said in response to Business Report questions.

It said that China was the world’s largest gold consumer and any impact on economic growth and consumer spending might influence jewellery demand.

“However, slowing global growth could prompt gold investment demand. At the moment, it is hard to speculate what may happen and to provide any insights into potential outcomes.”

Yesterday, the gold price increased by 0.26 percent to $1574 (R23675) an ounce, while the JSE Mining Index eased 1.88percent to 2790 points, while the Resources Index also fell marginally by 0.88 percent to 47210.97 points. South Africa is responsible for providing up to 15percent of the world’s gold, and is the second biggest gold producer in Africa after it was overtaken by Ghana last October.

Seleho Tsatsi, an investment analyst at Johannesburg-based Anchor Capital, said yesterday that South African-based gold producers were likely to fetch higher gold price resulting in higher revenue.

“The gold miners will be looking to capitalise on stronger gold prices by executing well this year. That entails hitting production targets whilst maintaining decent unit costs,” said Tsatsi.

The WHO said last week that it was convening a global research and innovation forum to mobilise international action in response to the new coronavirus (2019-nCoV), the virus’s provisional scientific name.

It said that the coronavirus had been transmitted to people who had not travelled to China.

Tedros Adhanom Ghebreyesus, the director-general of the WHO, said in a tweet on Sunday: “There’ve been some concerning instances of onward 2019 nCoV spread from people with no travel history to (China).”

The death toll of the coronavirus in China was now more than 900, surpassing the Sars virus, which claimed 800 lives.

Gold Fields shares fell 3.37percent to close at R99.71, while Harmony Gold fell 2.22percent to close at R45.27 on the JSE yesterday. Anglogold Ashanti fell 0.79percent to close at R294.67. 

BUSINESS REPORT