2020.03.0609:50:00UTC+00Gold Prices Rise As Virus Worries Mount

Gold prices rose sharply on Friday and were on track to post their biggest weekly gain since Oct 2011 on expectations that the spread of the coronavirus will inflict much greater financial damage than expected earlier.

Spot gold rose 0.75 percent to $1,685.12 per ounce, after having climbed more than 2 percent in the previous session. U.S. gold futures jumped 1.1 percent to $1,686.25.

Lingering uncertainty about the impact of the virus has clouded the outlook for global growth. More than 3,300 people have died globally and over 97,800 have been infected so far.

Cases soared in Italy, France, Greece and Iran, while a cruise ship was held off the Californian coast to test passengers showing symptoms of the disease.

The coronavirus outbreak will cut global growth by 0.1 percent to 0.4 percent and it will have a significant impact on developing Asian economies through weak domestic demand, tourism, trade and production linkages and supply disruptions, the Asian Development Bank said.

According to ADB analysis, the global impact will be in the range of $77 billion to $347 billion, or 0.1 percent to 0.4 percent of global gross domestic product.

The outbreak and subsequent spread of the coronavirus "has brought with it new risks to the economic outlook", New York Federal Reserve President John Williams said on Thursday.

This week's 50bps rate cut was "strong policy action" that provides "meaningful support to the economy and will help sustain the economic expansion. But "the outlook is evolving and highly uncertain", he added.