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PRECIOUS-Gold gains as pandemic fears hit risk appetite

Published 26/02/2020, 01:15 pm
© Reuters.  PRECIOUS-Gold gains as pandemic fears hit risk appetite
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Feb 26 (Reuters) - Gold prices rose on Wednesday, heading back towards a more-than seven-year high hit earlier this week, as a warning from the United States over the domestic spread of the coronavirus outbreak rattled global markets, supporting safe-haven demand.

FUNDAMENTALS

* Spot gold XAU= was up 0.5% at $1,643.49 per ounce, as of 0124 GMT, after having slumped as much as 1.9% in the previous session. On Monday, prices touched $1,688.66, their highest in more than seven years.

* U.S. gold futures GCv1 eased 0.2% to $1,647.

* Asian shares fell as a U.S. warning to Americans to prepare for the possibility of a pandemic drove another Wall Street tumble and pushed yields on safe-haven Treasuries to record lows. MKTS/GLOB US/

* The United States told Americans on Tuesday to begin preparing for the virus to spread within the country as outbreaks in Iran, South Korea and Italy escalated. The effects of the outbreak are likely to reverberate beyond China as most major economies in the region are expected to either slow down significantly, halt or shrink outright in the current quarter, according to a Reuters poll. The rapid spread of the virus and its impact on global economic activities increased bets for monetary policy easing by global central banks, with U.S. money market futures 0#FF: now fully pricing in a 0.25 percentage point cut by the end of June. USD/

* However, U.S. consumer confidence edged up in February, suggesting a steady pace of consumer spending that could support the economy despite growing fears over the fast-spreading virus. China has quarantined 94 passengers on a flight from Seoul to Nanjing after three were showing signs of fever, the state broadcaster CCTV said early on Wednesday. China's monthly net gold imports via Hong Kong plunged 77% to 9.34 tonnes in January, Hong Kong Census and Statistics Department data showed on Tuesday, as the country grapples with the outbreak that is seen damaging its growth. SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings rose 0.7% to 940.09 tonnes on Tuesday. GOL/ETF

* Palladium XPD= slipped 0.5% to $2,685.85 per ounce, while platinum XPT= gained 0.3% to $928.48.

* Silver XAG= rose 0.6% to $18.09 per ounce. DATA/EVENTS (GMT)

1500 U.S. New home sales-units (Jan)

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