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Gold gains as coronavirus epidemic fuels safe-haven demand – CNBC

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Freshly cast gold ingot bars sit in the foundry at the JSC Krastsvetmet non-ferrous metals plant in Krasnoyarsk, Russia, on Tuesday, Nov. 5, 2019.

Andrew Rudakov | Bloomberg | Getty Images

Gold prices rose on Wednesday, recovering from a sharp drop in the previous session, as safe-haven demand was boosted by worries over a fast-spreading coronavirus outbreak in China.

Spot gold climbed 0.12% to $1,554.1 per ounce, after declining 1.5% on Tuesday – the biggest since early November. U.S. gold futures rose 0.2% to $1,558.60.

“There’s an increase in demand (for gold) because of flight to safety with the coronavirus and concerns about (economic) growth,” said John Sharma, an economist at National Australia Bank (NAB).

“We are still witnessing deaths and quarantine problems. As long as deaths are around, there’ll still be increasing demand for gold.”

The death toll in China passed 490, as two U.S. airlines suspended flights to Hong Kong following the first fatality there and 10 cases were confirmed on a quarantined Japanese cruise ship.

The virus would delay a surge in U.S. exports to China expected from the Phase 1 trade deal that is set to take effect this month, the White House’s top economic adviser said on Tuesday.

Underpinning the metal further was a private sector survey that showed growth in China’s services sector slowed for a second straight month in January.

“Gold tested and failed numerous times ahead of $1,590 an ounce over the last week. It implies that the Wuhan situation would need to escalate sharply to give gold the necessary momentum to rise above $1,600 an ounce,” Jeffrey Halley, senior market analyst at OANDA, said in a note.

Gold hit a four-week high of $1,591.46 an ounce earlier this week, before paring gains as risk appetite improved after China took measures to cushion the economic impact of the outbreak.

Asian stocks gained as China readies more measures to support its economy jolted by the outbreak.

“If confidence continues to increase that the worst is behind us, gold will continue to suffer a daily close below $1,550 sets up a much deeper potential correction,” Halley said.

The metal may retest a support at $1,549 per ounce, with a good chance of breaking below this level and falling towards the Jan. 14 low of $1,535.75, said Reuters technical analyst Wang Tao.

Among other precious metals, palladium was up 0.8% at $2,453.93 an ounce, after touching a near two-week peak of $2,463.50 earlier in the session.

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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