Hong Kong gold market in best Lunar New Year debut since 2016, as investors chase safe-haven asset
- Gold’s rises coincides with Hang Seng Index’s worst open in four years
- Wuhan outbreak contributes to stocks sell-off, boosts safe-haven asset
The Hong Kong gold market rose on the first trading day of the Year of the Rat on Wednesday, rising to its best lunar year debut since 2016, as investors flocked to the safe haven asset amid concerns over the Wuhan coronavirus outbreak.
The gold market closed at HK$14,535 (US$1,871) a tael, or 37.9 grams, an increase of HK$125 or 0.9 per cent over its close on Friday, the last trading day of the Year of the Pig. It opened at HK$14,438 a tael on Wednesday before rising to HK$14,525 at one point.
“It is always the case – whenever the stock market is volatile, it is a good time to buy gold, as investors like to bet on gold as a safe haven,” said veteran gold trader Jasper Lo.
The benchmark Hang Seng Index closed at 27160.63 on Wednesday, down 2.8 per cent, or 789.01 points, for its worst lunar year trading start since 2016, the Year of the Monkey, when it plunged 3.8 per cent on debut. The Wuhan outbreak has contributed to a sell-off in retail, airline and financial stocks.
The Hong Kong gold market started the last lunar year, the Year of the Pig, 0.7 per cent down before rising by 17 per cent for the whole year.
Not surprisingly, its recent best performance coincided with the Hang Seng’s worst – it started the Year of the Monkey in 2016 5.9 per cent up, before rising another 8 per cent for the whole year.