Gold feeling pressure this morning while staying firmly above $1,630 as U.S. stock markets rally following their steep 2-day declines which included the Dow Jones Industrial Average posted its biggest two-day drop in percentage terms in two years. This morning, the Dow is up over 200 points at the opening bell in a somewhat expected rebound.

April gold futures settled at $1,650 an ounce Tuesday on Comex. The yellow metal edged higher Wednesday after dropping 1.6% in the previous session on profit taking. The daily decline didn’t completely erase Monday’s 1.7% rally. Gold is up 3.9% this month as investors have sought safe-haven assets amid mounting fears about the coronavirus and its economic impact. Currently, the April contract is at $1,635.50

The spread of coronavirus outside China has spurred gold toward $1,700 but has also caused equities to tumble. The U.S. Centers for Disease Control added to coronavirus fears Tuesday as the agency warned Americans to prepare for a coronavirus crisis. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.7% Tuesday to 940.09 metric tons, Reuters reported.

The Dow fell 3.2% Tuesday after sliding more than 1,000 points Monday, the third worst one-day point drop in the index’s 124-year history. The Standard & Poor’s 500 Index dropped 3% Tuesday.

The coronavirus, designated COVID19, has killed almost 2,800 people worldwide and sickened over 81,000. Most of the cases have been in China, where the outbreak started. The virus is a WHO-designated global health emergency.

“It’s not so much a question of if this will happen anymore but rather more a question of exactly when this will happen and how many people in this country will have severe illness,” Dr. Nancy Messonnier, the head of the National Center for Immunization and Respiratory Diseases at the Centers for Disease Control and Prevention, said during a media briefing, according to NBC.

Fears that the disease’s spread will affect the global economy have increased speculation that the world’s central banks will have to cut interest rates — something that’s usually bullish for gold. The CME FedWatch Tool shows 65.6% odds in favor of a rate cut by the Federal Reserve in April, compared with just 12.8% a month ago. The probability of a cut at the next meeting of policy makers — in March — has also increased to 32.1% from 3.8% a month ago.

In economic news this week, U.S. GDP, initial jobless claims, durable goods and pending home sales data are due out on Thursday. Japanese industrial production, jobs and retail sales figures are scheduled for Friday.

May silver futures fell 3.7% Tuesday to settle at $18.27 an ounce on Comex. They’ve dropped 1.9% in the first two days of this week. Front-month silver futures up 1.4% so far this month after a 0.5% rally in January.

Spot palladium, a metal used primarily in autocatalysts rose 2.8% Tuesday. It surged 11% last week and touched a new record amid a supply crunch. It’s up 19% this month. Spot platinum fel 4% Tuesday and is down 3.5% this month.

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