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Gold rises as China virus scare spurs safe-haven bid – CNBC

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Gold will continue to shine amid a weak dollar, says author and gold pro Jim Rickards.

Simon Dawson | Bloomberg | Getty Images

Gold prices rose on Friday as the China coronavirus stoked fears of a wider epidemic that could hamper economic growth. 

Spot gold was 0.64% higher at $1,572.84 per ounce but held above the key $1,550 level, supported by the prospect of easy monetary policy globally. U.S. gold futures jumped 0.4% to $1572.4 per ounce.

The Center for Disease Control and Prevention announced a second case of the deadly coronavirus in Chicago on Friday. The CDC also said 63 patients in 22 states are under investigation for coronavirus infection.

The spread of the virus ahead of the Lunar New Year, a peak period of travel and gold demand in China, kept investor concerns heightened.

“Gold prices are facing headwinds from gaining equities and a stronger dollar but it is unlikely to fall below $1,520 as a bunch of geo-political uncertainties still exist,” Saxo Bank analyst Ole Hansen said.

Furthermore, the dollar hovered close to a more than one and half month high against a basket of currencies, making gold expensive for buyers holding other currencies.

“With a low interest rate environment, geopolitical risks and uncertainties such as U.S. President’s impeachment, the conditions are still quite conducive to further upside in gold,” ANZ analyst Daniel Hynes said.

After the European Central Bank left rates unchanged on Thursday, investors are looking to the U.S. Federal Reserve’s first meeting of the year scheduled on Jan. 28-29.

However, in the short-term, “the Libya oil issue and the coronavirus have not helped (gold) much and if this continues, we might see a challenging quarter ahead,” Saxo Bank’s Hansen said.

Libya earlier this week declared force majeure on two major oilfields following a military blockade, and protests escalated in Iraq, pushing investors towards safe-haven assets.

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.2% to 900.58 tonnes on Thursday.

Elsewhere, palladium dipped 0.6% to $2,447.11 per ounce, and was on track to register its first weekly fall in five at about 1.3%.

Silver rose 0.2% to $17.82 per ounce but was set to post its biggest weekly decline since early-December at nearly 1%. Platinum rose 0.2% to $1,004.44, but was down 1.4% for the week, its worst since the week ended Dec. 20.

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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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