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PRECIOUS-Gold nears 7-year peak on virus economic impact; palladium hits record

Published 20/02/2020, 12:48 am
PRECIOUS-Gold nears 7-year peak on virus economic impact; palladium hits record
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(Updates prices, adds comments and details)

* Palladium hits an all-time high of $2,841.54

* Gold in euros hits record peak of 1,493.09 euros/oz

* SPDR Gold holdings rise to over 3-yr peak

* U.S. Fed minutes from Jan. 28-29 meeting due at 1900 GMT

By Sumita Layek

Feb 19 (Reuters) - Gold climbed towards a seven-year peak on Wednesday as concerns over the global economic impact of the coronavirus epidemic boosted safe-haven interest, while palladium resumed its record rally driven by concerns over a supply shortfall.

Spot gold XAU= rose 0.6% to $1,610.75 per ounce by 1116 GMT. The metal jumped to $1,610.80 earlier, its highest since Jan. 8, when gold hit its highest in nearly seven years. U.S. gold futures GCcv1 rose 0.7% to $1,614.

"We're still concerned that the recovery of economic activity might take a little bit longer in China," Julius Baer analyst Carsten Menke said.

"On the ground, the impact seems to be stronger than what's currently reflected in the stock markets. Gold investors are taking a closer look at these developments. That's why prices are higher."

Bullion held firm even as European shares hit a fresh record high on a decline in new cases of coronavirus in China, and as the dollar rose to a more than four-month high against rivals. .EU USD/

Markets were alarmed on Tuesday after iPhone maker Apple Inc (NASDAQ:AAPL) warned that its sales might fall because of slow ramp-ups in manufacturing facilities in China. in euros XAUEUR=R hit an all-time peak of 1,493.09 euros per ounce.

Investors were awaiting the minutes of the Federal Reserve's Jan. 28-29 policy meeting, due at 1900 GMT. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Indicative of investor sentiment, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD , rose 0.6% to 929.84 tonnes on Tuesday, their highest since Nov. 11, 2016. GOL/ETF

Elsewhere, palladium XPD= scaled a record high of $2,841.54 an ounce and was last up 5.1% at $2,771.39.

The autocatalyst metal, which had gained 54% in 2019 on supply shortages, will be in a substantial deficit in 2020 as well, Anglo American (LON:AAL) Platinum Ltd said. supply in not able to catch up ... despite the disappointing trend in Chinese and European car sales, tight emission norms keeps the market in deficit ... and this is visible in dwindling ground stocks," UBS commodities analyst Giovanni Staunovo said.

Ongoing power outages in South Africa - one of the largest producers of the metal - "just further aggravates the situation and is a supportive element", he added. XAG= gained 1.2% to $18.37, having earlier hit a more than one-month high at $18.39, while platinum XPT= rose 2.1% to $1,012.52

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