The price of gold jumped past $1,700 per ounce on Monday for the first time since late 2012, as growing fears over the rapidly spreading coronavirus outbreak and a plunge in crude oil hammered equities and sent investors scurrying for safe havens, Reuters reported.
By 0054 GMT, spot gold rose 1.5% to $1,699.20 per ounce, having touched its highest since December 2012 at $1,702.45 earlier in the session. U.S. gold futures jumped 1.6% to $1,699.70 per ounce.
Asian equities sank as investors fled to bonds to hedge the economic shock of the coronavirus, and oil plunged more than 20% after Saudi Arabia slashed its official selling price.
Russia, with its oil-based economy, is set to feel the most pressure from the Saudi move. But the country’s authorities have taken a set of preventive measures, including a ‘budget rule’ which allows it to support the ruble and the economy in general by using money from its $150-billion National Wealth Fund.
Another measure taken to minimize risks of fluctuating oil prices and improve macroeconomic stability was a 2-year-long gold-buying spree by the Bank of Russia. The country’s gold bullion stockpile has continued to grow at a record pace in 2019, climbing to well over 2,600 tons.
Russia has continued its push to steer its international reserves away from the dollar and buy gold instead, a trend recently embraced by many central banks globally. The country also produced over 185.1 tons of gold in the first six months of 2019 – a 17.77 percent increase compared to the same period last year when production reached 157.2 tons.