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PRECIOUS-Gold slips, but on track for 3rd monthly gain on pandemic fears

Published 28/02/2020, 08:16 pm
PRECIOUS-Gold slips, but on track for 3rd monthly gain on pandemic fears
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* Palladium sheds 5% but set for best month since Nov 2016

* Platinum on track for worst week since Sept 2011

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

* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl

By Shreyansi Singh

Feb 28 (Reuters) - Gold prices retreated on Friday as investors booked profits from a 1% jump in the last session, but the metal had some support as mounting concerns over the rapid spread of coronavirus lifted expectations of rate cuts by major central banks.

Spot gold XAU= was down 0.7% at $1,630.86 per ounce by 0845 GMT. U.S. gold futures GCcv1 slipped 0.6% to $1,631.90 per ounce.

"This virus is getting a lot more serious ... People are worried there might be a need for some more stimulus measures, so that means lower (interest) rates," said John Sharma, economist at National Australia Bank, adding that high prices prompted some profit-taking.

Bets rose that the U.S. Federal Reserve would cut interest rates as soon as next month to cushion the economy from the virus' impact. interest rates reduce the opportunity cost of holding non-yielding bullion.

Bullion has added almost 3% so far this month, its third straight monthly gain. Prices hit a 7-year high of $1,688.66 earlier this week.

"On every dip we make, we are expecting a buy because the main trend for gold is still up," said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.

World share markets were headed for the worst week since the 2008 financial crisis as investors braced for the virus' impact on economic growth. MKTS/GLOB USD/

Countries on three continents reported their first cases of the coronavirus on Friday, and the World Health Organization said all countries needed to prepare to combat the virus. other precious metals, palladium XPD= slipped 2.6% to $2,770.03 per ounce, and fell as much as 5% but was on track to register its most monthly gains since November 2016.

Palladium jumped to a record $2,875.50 in the previous session on a sustained supply shortfall, with the world's largest producer of the metal, Nornickel, projecting a global deficit of 0.9 million ounces in 2020. palladium having undergone some price corrections, it was much stronger than some expected, considering it's an industrial, rather than monetary metal," said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.

"When sentiment is ruled by fear, investors always rush to cash and liquidity, and also sell profitable investments due to margin calls or to cover other investment losses."

Platinum XPT= shed 1.9% to $881.96, en route to its worst fall in a week since September 2011.

Silver XAG= fell 2.7% to $17.22 an ounce, on track to post its worst month in three.

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