March 6, 2020 / 3:34 AM / a month ago

PRECIOUS-Gold set for biggest weekly gain since Oct 2011 as fears mount over virus impact

 (Updates prices)
    * Asian stocks fall, U.S. Treasury yields at record low
    * Interactive graphic on coronavirus spread: open tmsnrt.rs/3aIRuz7
 in external browser

    By Asha Sistla
    March 6 (Reuters) - Gold rose on Friday, on track to post
its biggest weekly gain since late October 2011, over fears that
the global coronavirus outbreak could deal a hard blow to the
world economy. 
    Spot gold        was up 0.2% to $1,674.20 per ounce by 0813
GMT, having risen more than 2% in the previous session. 
    U.S. gold futures         rose 0.4% to $1,675.20. 
    "Gold is moving higher because markets are expecting further
cuts and on ongoing risk-aversion right now as (wider) markets
are concerned," said DailyFx currency strategist Ilya Spivak.
    "The biggest thing here is how worried do markets remain
about this coronavirus impact."    
    The metal has gained as much as 5.5% so far this week as
worries over the coronavirus sent investors scurrying for
safe-havens, with the U.S. Federal Reserve issuing an emergency
50 basis point interest rate cut on Tuesday.              
    Lower interest rates reduce the opportunity cost of holding
non-yielding bullion.
    "We've seen a consistent switch out of equities into gold as
a consequence of the worsening macro backdrop, and that's
something gold will continue to see in the foreseeable future,"
ANZ analyst Daniel Hynes said. 
    Asian stocks on Friday tumbled following Wall Street, while
U.S. 10-year Treasury yields             fell to a record low,
sending the dollar to a two-month low against key rivals.
                         
    Globally, there have been over 98,000 cases and more than
3,300 deaths from the coronavirus. Mainland China, where the
virus was discovered in late 2019, reported 143 new confirmed
cases of infection on Thursday.                          
    The wide-spread epidemic has forced many cities and
countries to temporarily close industrial operations, while
travel restrictions have weighed on service sectors. 
    The epidemic poses "evolving risks" to the U.S. economy and
U.S. central bank officials are monitoring developments closely,
New York Federal Reserve President John Williams said on
Thursday.              
    Palladium        fell 0.6% to $2,516.41 per ounce. 
    "Palladium continues to outperform platinum but we also
(have) the issue around industrial demand from the auto sector,
which is being hit pretty hard at the moment," ANZ's Hynes said.
    The autocatalyst metal slumped as much as 13% on Feb. 28, 
after hitting an all-time high of $2,875.50 the day before due
to a stark supply shortfall.
    Silver        was down 0.4% to $17.34 an ounce, while
platinum        shed 0.1% to $863.86.

 (Reporting by Asha Sistla and K. Sathya Narayanan in Bengaluru;
Editing by Tom Hogue, Subhranshu Sahu and David Evans)
  
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