February 25, 2020 / 2:07 AM / a month ago

PRECIOUS-Gold falls from 7-year high on profit-taking, virus fears cap losses

    Feb 25 (Reuters) - Gold prices fell 1% on Tuesday as
investors chose to pocket profits after the metal hit a
seven-year high in the previous session, although growing fears
over a spike in new coronavirus cases outside of China capped
bullion's losses.
    * Spot gold        was down 0.7% to $1,649.49 per ounce by
0132 GMT, having touched a session low of $1,642.89.
    * Bullion rose to a more than seven-year high of $1,688.66
in the previous session.
    * U.S. gold futures        fell 1.5% to $1,651 an ounce.
    * "The 1% fall was because of margin calls but definitely
that has triggered an added wave of profit-taking," said Stephen
Innes, chief market strategist at AxiCorp.
    * "In this kind of an environment, when stock markets are
crashing it is easy to cover margin call. (But) given the
overwhelmingly risk-off market, we should see gold find some
support," he added. 
    * Asian shares extended losses amid fears the virus was
rapidly mutating into a pandemic that could cripple global
supply chains and wreak far greater economic damage than first
    * The death toll climbed to seven in Italy on Monday and
authorities sealed off the worst-affected towns, closed schools
and halted the carnival in Venice, where there were two cases,
while several Middle East countries were dealing with their
first infections.             
    * Investors are pricing in an increased chance the European
Central Bank will cut interest rates sooner rather than later,
reflecting heightened fears that the virus will spread and hit
the euro zone economy hard.             
    * U.S. Treasury Secretary Steven Mnuchin told Reuters he
does not expect the outbreak to have a material impact on the
Phase 1 U.S.-China trade deal, although that could change as
more data becomes available in coming weeks.             
    * Financial markets on Monday ratcheted up bets the U.S.
Federal Reserve will be pressed to cut interest rates to cushion
a feared hit to economic growth from the epidemic.             
    * The U.S. economy should continue to perform well this year
and monetary policy is currently well positioned despite the
risk posed by the virus, Cleveland Fed President Loretta Mester
said on Monday.             
    * The Trump administration is considering asking lawmakers
for emergency funding to ramp up its response to the
fast-spreading coronavirus, a White House spokesman said without
providing details.             
    * Goldman Sachs said commodity prices could fall sharply
before Chinese stimulus to combat the coronavirus impact later
this year helps the sector achieve its 12-month return forecast
of about 10%.             
    * Palladium        rose 0.6% to $2,642.97 an ounce, while
platinum        gained 0.3% to $966.53.
    * Silver        eased about 0.3% to $18.58 per ounce.

0700 Germany GDP Detailed YY NSA (Q4) 
0700 Germany GDP Detailed QQ SA  (Q4)
1500 U.S.    Consumer Confidence (Feb)

 (Reporting by K. Sathya Narayanan in Bengaluru; Editing by
Subhranshu Sahu)
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