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PRECIOUS-Gold at 7-year high, set for strongest week in 6-mths

Published 21/02/2020, 08:13 pm
© Reuters.  PRECIOUS-Gold at 7-year high, set for strongest week in 6-mths
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(Updates prices)

* China reports rise in new cases

* Palladium up about 10% so far this week

* Silver on track to post best week in nearly 6-months

* Coronavirus interactive graphic: https://tmsnrt.rs/2GVwIyw

By Shreyansi Singh

Feb 21 (Reuters) - Gold prices rose 1% to their highest in seven years on Friday and were set for their strongest week in more than six months as demand for the safe-haven asset increased after a spike in coronavirus cases.

South Korea reported 52 new cases of the virus, taking the national total to 156, while Japan reported the first fatalities from a cruise ship that accounts for the biggest cluster of infections outside China. gold XAU= rose 0.8% to $1,632.65 per ounce by 0845 GMT, after hitting its highest since Feb. 14, 2013 at $1,635.98 earlier in the session. For the week, prices have risen 3% so far and were set to post their biggest weekly percentage gain since Aug. 9.

U.S. gold futures GCv1 jumped 1% to $1,636.50.

"Main focus for gold seems to be the virus uncertainty ... and its spread across the world," said John Sharma, an economist at National Australia Bank.

"This is spreading some fear ... not very encouraging in terms of growth, investment, consumer and business confidence."

Asian shares fell as virus concerns caused funds to seek shelter in U.S. assets, lifting the dollar to three-year highs. MKTS/GLOB

China also reported an uptick in new coronavirus cases on Friday, boosted by more than 200 people testing positive in two prisons outside of Hubei province. spread of the disease could derail a "highly fragile" projected recovery in the global economy in 2020, the International Monetary Fund said on Wednesday. cut its benchmark lending rate on Thursday to soften the virus' impact on its economy and is likely to roll out more measures. of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD , rose 0.25% to 933.94 tonnes on Thursday, its highest since November 2016. GOL/ETF

Spot gold may rise into a range of $1,639-$1,667 per ounce, said Reuters technical analyst Wang Tao. TECH/C

Elsewhere, palladium XPD= shed 0.1% to $2,687.22 an ounce. But the metal was up about 10% this week, set for its strongest week in more than a month.

The autocatalyst metal had risen to a record high of $2,841.54 earlier in the week on supply concerns.

"Low inventories from a structural market deficit and limited scope of a supply response should keep demand strong," ANZ analysts said in a note.

Silver XAG= was up 0.8% to $18.50 and was set to register its best week since week ended Aug. 30. Platinum XPT= edged higher by 0.1% to $978.49.

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