February 6, 2020 / 11:22 AM / 15 days ago

PRECIOUS-Concern over coronavirus drives gold higher

(Updates prices, adds details)

* China to halve some U.S. tariffs from Feb. 14

* Spot gold could rise into $1,564-$1,570 range -technicals

* Platinum slips from one-week high

* U.S. non-farm payrolls report due on Friday

By Swati Verma

Feb 6 (Reuters) - Gold prices rose on Thursday as concern over the coronavirus and its impact on the global economy drove buying in the safe-haven asset and outweighed news of lower Chinese tariffs that are likely to ease trade tensions with the United States.

Spot gold gained 0.6% to $1,565.06 per ounce as of 1252 GMT, having dropped on Wednesday to its lowest since Jan. 21 at $1,546.90. U.S. gold futures rose 0.4% to $1,569.00.

“There is a fundamental demand for gold based on expectations of a slowdown in economic growth due to the virus outbreak and there is also support from central banks keeping rates low,” Saxo Bank analyst Ole Hansen said.

Buyers are returning to the market after finding some confidence from gold managing to hold on to support around $1,550, Hansen added.

Spot gold could rise into a range of $1,564 to $1,570 after stabilising around a support at $1,549, Reuters technical analyst Wang Tao said.

The death toll from the virus in mainland China jumped to 563, with experts stepping up efforts to combat a disease that has shut down Chinese cities and forced thousands more into quarantine around the world.

The World Health Organization on Wednesday played down reports of “breakthrough” drugs being discovered to treat people infected with the new virus.

“Globally, people are looking at the coronavirus more than anything else and also how that would affect the global economy. That is supporting gold,” said Brian Lan, of Singapore dealer GoldSilver Central.

“It (the cutting of tariffs) is countered by how the virus is going to affect the economy, businesses and China’s GDP.”

China on Thursday said it would halve additional tariffs levied against 1,717 U.S. goods last year. The move comes after Beijing and Washington signed a Phase 1 deal that brought a truce to a bruising trade war between the world’s two largest economies.

For future market direction, investors will look to the U.S. non-farm payrolls report due on Friday to gauge the strength of the labour sector, which is also an indicator of the economy’s health.

Elsewhere, palladium fell 0.7% to $2,415.70, while silver rose 1% to $17.77.

Platinum eased by 0.6% to $975.51 after touching a one-week high of $987.60. (Reporting by K. Sathya Narayanan and Asha Sistla in Bengaluru Editing by David Goodman and Barbara Lewis)

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