The safe haven asset gold is starting the week on an extremely bullish note as markets grow increasingly concerned about the coronavirus outbreak impacting the global economy after more countries outside of China report an uptick in the number of infected cases. At the time of writing, GOLD is trading at a little above $1,661.

The market sentiment was severely impacted after South Korea confirmed over 700 infections and seven deaths from the virus. Meanwhile Italy has seen around 150 infections and three deaths and Iran has confirmed around 43 cases and eight deaths so far. This comes even as China confirms a slowdown in the number of affected patients in its provinces.

The impact has been felt on global equity markets which are seeing sharp sell-offs in the wake of the deteriorating risk appetite. The coronavirus is likely to drive a contraction in China’s Q1 2020 GDP as the world’s largest economy grapples with extended shutdowns of factories and offices, higher number of infected cases and death toll, and travel restrictions.

Gold remains in favour owing to the high level of uncertainty in global financial markets after recent estimates from Oxford Economics warning that the world’s GDP could decline to close to zero in H1 2020 if the outbreak escalates into a global pandemic.