Gold price at seven-year high on coronavirus fears

The price of gold has surged to its highest level in seven years as worries about the coronavirus led investors to seek a safe place for their money.

Gold prices climbed more than 2% on Monday to levels not seen since February 2013.

The price for immediate delivery went as high as $1,678.58 an ounce before falling back slightly.

Meanwhile, stock markets in Europe opened lower, with London’s FTSE 100 down more than 2% in early trading.

Milan’s main index was worst hit, falling more than 4%. Italy has seen Europe’s worst outbreak of the coronavirus and the government has announced a series of drastic measures, with a lockdown in place in several small towns.

Frankfurt’s Dax index and the Paris Cac-40 both fell more than 3%.

Airlines and travel firms were particularly hard hit, although the sandstorms in the Canary Islands also weighed on their share prices.

In the UK, the three biggest fallers on the FTSE 100 were EasyJet, Tui and British Airways owner IAG, down 10%, 9% and 7% respectively.

The market moves come as companies continue to warn about the effect of the coronavirus on their supply chains and overall financial health.

Associated British Foods, which owns clothing retailer Primark, warned on Monday that there could be shortages of some lines if delays in factory production in China were prolonged because of virus-related shutdowns.

Analysts said the gold price could breach the $1,700 barrier soon.

“Gold has finally established some serious momentum,” said Jeffrey Halley, senior market analyst at online trading platform Oanda.

At the same time, oil prices fell more than 3% on Monday, as investors worried about a fall in demand following the temporary factory closures due to the virus. The price of Brent crude dropped by nearly $2 to $56.57 a barrel.