Gold held its ground as the disruption to the global economy from the coronavirus pandemic intensified, with the US announcing that it’ll suspend travel from Europe to battle the outbreak, and investors shunning risk assets from equities to industrial commodities. Palladium tanked.

Bullion steadied after an early advance, with US equity futures sharply lower as President Donald Trump’s address appeared to give little confidence. Credit market stress ticked higher. On Wednesday, gold fell as some investors were likely prompted to sell the metal to cover margin calls with the Dow Jones Industrial Average collapsing into a bear market, ending a historic bull run.

Gold is holding near a seven-year high amid prospects for further central bank easing as the health crisis worsens. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the coronavirus is ten times more deadly than seasonal flu, while the World Health Organisation declared the outbreak a pandemic. The next monetary policy salvo comes from the European Central Bank, which will unveil a decision later Thursday.

“The declaration of the worldwide coronavirus outbreak as a pandemic has further knocked investor confidence,” said Gavin Wendt, senior resource analyst at MineLife. “Not surprisingly gold has surged, with its key characteristics as a safe haven in a time of crisis holding firm.”

Spot gold climbed as much as 0.9% to $1 650.43 an ounce and traded 0.2% higher at $1 637.97 at 7:36 a.m. in London as US Treasury yields tumbled again. Bullion hit $1 703.39 on Monday, the highest level since December 2012, and it’s advanced 26% over the past 12 months.

There’s rising concern that the virus outbreak and market ructions will, in turn, trigger stresses in global credit markets. Borrowing costs in Asia’s dollar bond market surged, as did the price of insuring such debt against default. That followed similar moves in the U.S., aiding gold’s haven appeal.

TRUMP’S ADDRESS

In the US, Trump said he will restrict travel from Europe for the next 30 days, excluding the UK, and ordered the deferment of some tax payments for some individuals and businesses. In Europe, the ECB will announce its decision at 1:45 p.m. local time in Frankfurt, followed by a briefing from Christine Lagarde.

“Global central banks and governments have so far been slow to respond with stimulus measures, but even lower rates are in the pipeline and they will provide further support for gold,” said Wendt.

Mark Mobius, the veteran emerging-markets investor, said “the trend for gold is going to continue to go up” even after recent volatility as declining interest rates and a surge in money supply benefit the precious metal. “First of all, money supply is going through the roof,” Mobius told Bloomberg TV. Also, rates are falling worldwide, and Europe is in “negative territory already.”

Among other main precious metals, silver and platinum dropped. Palladium also tumbled, losing 3.9% in a move that will put the metal in a bear market unless the intraday decline is erased.