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PRECIOUS-Gold holds gains on worries of coronavirus impact on world economy

Published 30/01/2020, 11:46 pm
© Reuters.  PRECIOUS-Gold holds gains on worries of coronavirus impact on world economy
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(Updates prices)

* Germany's 10-year Bund yield drops to near 3-month low

* U.S. 10-year Treasury yields falls to lowest since Oct. 10

* WHO to decide whether virus constitutes global emergency

* Norilsk Nickel to deliver 3 T of palladium to market

By K. Sathya Narayanan

Jan 30 (Reuters) - Gold held onto gains on Thursday, supported by concerns over the potential impact on global economic growth of a fast-spreading coronavirus outbreak in China which has killed 170 people.

Spot gold XAU= was up 0.2% to $1,579.63 per ounce by 1220 GMT after rising 0.7% on Wednesday, while U.S. gold futures GCcv1 were 0.6% higher at $1,579.00 per ounce.

"The whole run into gold and government debts (bonds), away from equities, is due to worries regarding the scale of the outbreak of the virus," said SP Angel analyst Sergey Raevskiy.

"Copper prices are falling off a cliff, which is an indication of how the markets perceive the risks of the virus to the economic growth." Copper is often regarded as a leading indicator of the health of the global economy. MET/L

Global equity markets fell, while Germany's benchmark 10-year Bund yield DE10YT=RR dropped to a near three-month low and U.S. 10-year Treasury yields US10YT=RR hit their lowest since Oct. 10. MKTS/GLOB US/ Chinese government economist on Wednesday said China's economic growth may drop to 5% or even lower due to the outbreak, which has spread to more than 10 countries. Reserve chair Jerome Powell acknowledged the risks of a short-term slowdown in China, including to the U.S. economy, following the central bank's widely expected decision to keep interest rates unchanged. is often seen as a safe store of value during times of political and economic uncertainty.

The World Health Organisation (WHO) will reconvene on Thursday to decide whether the coronavirus outbreak constitutes a global emergency. if the (gold) price can surpass the high reached three days ago at (around) $1,585, we will have another signal of strength," ActivTrades chief analyst Carlo Alberto De Casa said in a note.

Gold is being supported by markets' struggle to understand the "real" impact of the virus on the global economy, he added.

Elsewhere, palladium XPD= lost 0.2% to $2,283.85 per ounce, having hit a record high of $2,582.19 on Jan. 20 on supply worries.

Russia's Norilsk Nickel said on Wednesday its Global Palladium Fund would deliver three tonnes of palladium ingots to the market from its current stock to provide short-term relief to tight supplies. XAG= gained 1.1% to $17.74, while platinum XPT= fell 0.4%, to $970.23.

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