PRECIOUS-Gold subdued as abating coronavirus fears whet risk appetite

(Updates prices)
* SPDR Gold holdings jump to over three-month high
* Dollar holds near four-month high
* Silver dips to one-week low

By Brijesh Patel
Feb 12 (Reuters) - Gold prices eased to a near one-week low
on Wednesday as risk sentiment improved after a drop in the
number of new coronavirus cases comforted markets that the
epidemic's effects could be contained.
Spot gold XAU= was steady at $1,567.77 per ounce by 1:40
p.m. EST (1840 GMT), having touched its lowest level since Feb.
6 at $1,561.16 earlier.
U.S. gold futures GCv1 settled 0.1% higher at $1,571.60.
"It's basically just risk-on (sentiment) here. Some of the
coronavirus fears seem to be fading a little bit and safe-haven
buyers, who were buying gold, are starting to unwind some
positions," said Ryan McKay, a commodity strategist at TD
Securities.
"Gold is going to continue to trade range-bound ... but the
underlying factor that's supporting gold is the Federal Reserve
and the central banks globally, especially when the interest
rates have been kept really low."
Investors' appetite for riskier assets grew as a drop in the
number of new coronavirus cases and the Federal Reserve
chairman's optimistic view of the economy lifted world stocks
for a third day. MKTS/GLOB
China reported its lowest number of new virus cases since
late January, lending weight to a prediction from its senior
medical adviser that the outbreak might be over by April.
Also limiting gold's appeal, the dollar .DXY held near a
four-month high against a basket of rivals, making the metal
expensive for investors holding other currencies. USD/
Fed Chair Jerome Powell on Tuesday told Congress the U.S.
economy was in a good place, but cited the potential threat from
the virus epidemic and concerns about the economy's long-term
health. However, it was still unclear to what extent economic growth
would take a hit from the fast-spreading virus that has killed
more than 1,100 people, shuttered businesses in China and roiled
financial markets since late January. "With a plethora of global risk simmering on the backburner
– supply chains and demand contraction notwithstanding, I still
think it's too early to downgrade Covid-19 to a nasty case of
the sniffles and gold will remain bid on a dip," Stephen Innes,
chief market strategist at AxiCorp, said in a note.
Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust GLD , rose 0.67% to 922.23 tonnes on
Tuesday, the highest in over three months. GOL/ETF
In other precious metals, palladium XPD= gained 2.4% to
$2,396.68 an ounce, silver XAG= fell 0.7% to a one-week low of
$17.50 and platinum XPT= dipped 0.6% to $963.43.