March 9, 2020 / 3:35 PM / a month ago

PRECIOUS-Gold backtracks from $1,700 top on profit-taking

 (Updates prices)
    * Global equities and energy markets slide
    * Palladium hits its lowest since Feb. 12 

    By Asha Sistla
    March 9 (Reuters) - Gold retreated from the $1,700 level
touched briefly earlier on Monday, as investors sold the bullion
to cover margin calls amid plummeting equity and energy markets,
overshadowing the metal's safe-haven demand. 
    Autocatalyst metal palladium, meanwhile, slid as much as 8%
in early trade amid wider risk-off sentiment.
    Spot gold        was down 0.1% at $1,672.32 per ounce by
1:54 p.m. EDT (1754 GMT), while U.S. gold futures        
settled up 0.2% at 1,675.70.
    Gold had been up as much as 1.7% in a volatile session,
having touched its highest since December 2012 at $1,702.56
earlier. However, the price rally has led to profit taking in
the metal, analysts said.
    "It's a little bit surprising with gold not having done
better - we did hit the $1,700 mark in early trading but it has
come down and it seems to be a sale across all assets," said
Mitsubishi analyst Jonathan Butler.
    "The (decline) may be partly because of margin calls being
made in other commodities or asset classes, which means
liquidation in gold."
    Wall Street's main stock indexes plummeted about 5% as a
slump in oil prices and the rapid spread of the coronavirus
amplified fears of a global recession.     
    Oil prices dived by a third, its biggest daily rout since
the 1991 Gulf War, as Saudi Arabia and Russia indicated they
would increase supply to an oversupplied market. Gold is often
viewed as a hedge against oil-led inflation.      
    "We have this two-way battle going on between leveraged
hedge funds, who need to reduce again, and investors trying to
find some safe haven away from falling stock markets, especially
the energy sector," said Saxo Bank analyst Ole Hansen.
    On Sunday, Italy put much of its north under virtual
lockdown to contain the virus outbreak.              
    More than 111,600 people have been infected by the
coronavirus across the world and over 3,800 have died, according
to a Reuters tally of government announcements.             
    Investor focus next turns to the European Central Bank
meeting due on Thursday and the U.S. Federal Reserve's policy
meeting on March 18.
    In other precious metals, palladium fell 2.9% to $2,491.15
an ounce, having earlier dipped to its lowest since Feb. 12 at
$2,352. 
    "Expectations of industrial demand across metals are being
re-evaluated in light of the coronavirus and that is affecting
palladium, (whose) biggest single market is China," Mitsubishi's
Butler said.
    Silver        fell 1.9% to $16.98 an ounce, while platinum
       was down 4.3% at $861.74.

 (Reporting by Asha Sistla and Harshith Aranya in Bengaluru
Editing by Nick Zieminski and Jonathan Oatis)
  
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