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On this day — February 10, 2020
Chinese New Year: Chinese gold demand surges in the lead-up to Lunar New Year as families exchange gold pendants, rings and bars. Year-on-year, China's January–February gold imports run 30–50 percent above other months.
Monday — typically a high-volume trading day as markets digest weekend news. Asian gold imports often see Monday surges in major demand countries.
Day 41 of 366 · Q1 2020 · 11.2% through the year
February 2020 gold market: Calm before the COVID storm
VolatileSteady gains unwound in a sharp late-month risk-off.
For most of February gold drifted higher to around $1,640 as COVID-19 spread beyond China and bond yields fell. In the final days of the month, however, a violent global equity selloff dragged gold down too, as investors sold winning positions to raise cash — a preview of the liquidity scramble to come.
What drove gold in February 2020
- COVID-19 spreading globally
- collapsing bond yields
- late-month equity crash
- early dash-for-cash selling
Key events in February 2020
- Feb 24Global markets begin steep COVID selloff
- Feb 28Gold drops with stocks as funds raise cash
What happened next
The late-February cash scramble was a dress rehearsal for March's full-blown liquidity crisis.
For gold buyers
Gold's late-February dip showed that in a panic's first phase even safe havens fall as investors sell what they can, not what they want to.
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