PRECIOUS-Gold rises on policy stimulus expectations as G7 meets

(Updates prices, recasts to show G7 meeting under way)
* G7 conference call started at 1200 GMT
* Markets price in Fed rate cut of at least 0.25 percentage
points
* Global equities rise on central bank stimulus hopes
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl

By Sumita Layek
March 3 (Reuters) - Gold prices rose on Tuesday on hopes of
interest rate cuts by central banks as leading policymakers from
the Group of Seven (G7) nations met to discuss how to contain
the economic impact from the global coronavirus outbreak.
Spot gold XAU= was up 0.8% at $1,602.85 an ounce by 1217
GMT, having gained more than 1% in the previous session. U.S.
gold futures GCcv1 firmed 0.6% to $1,604.10.
"The Fed fund futures have seen a shift from just pricing in
one rate cut this year to three now. These shifting expectations
have resulted in the weakening of the dollar and a supportive
environment for gold prices," said FXTM market analyst Han Tan.
Markets are pricing in a cut of at least 25 basis points to
the current 1.5-1.75% target rate at the U.S. Federal Reserve's
March 17-18 meeting as well as a 10 basis point cut to the ECB's
key rate at its March 12 meeting.
The dollar index .DXY held close to the previous session's
one-and-a-half-month low against a basket of currencies. USD/
Investors are now focused on a G7 conference call on
Tuesday, in which finance ministers and central bank governors
will discuss ways to bolster their economies in the face of the
spreading coronavirus outbreak. Bank of England Governor Mark Carney said global
policymakers are working on a "powerful and timely" response to
allay fears of a new global recession. "Global economic conditions were fragile entering into 2020
and any hopes of them recovering in light of the expected
dilution in trade tensions were snuffed out because of this
coronavirus outbreak," FXTM's Tan said.
Gold prices slumped more than 4.5% on Friday amid a broader
market sell-off but have recovered since.
"I think we have done enough on the downside (in gold) for
the time being and with much talk of rate cuts/stimulus in the
offing, the next move should be upwards," said David Govett,
head of precious metals at Marex Spectron.
"However, this does depend on the scale of the support
offered by central banks."
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion and also weigh on U.S. yields and the
dollar, in which gold is priced.
Meanwhile, global equities also rose on expectations of
central bank stimulus. MKTS/GLOB
Among other precious metals, palladium XPD= rose 0.5% to
$2,535.an ounce, silver XAG= gained 0.7% to $16.84 and
platinum XPT= was up 0.7% at $866.70.

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Gold gains with equities https://tmsnrt.rs/2vBAsmy
World finance officials plot 'powerful and timely' response to
beat coronavirus ID:nL4N2AW2GJ
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