PRECIOUS-Gold drops 3%, other metals extend slide in rush for cash

(Updates prices)
* Platinum, silver fall about 4%
* SPDR gold holdings fell 0.2% on Monday
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl

By Sumita Layek
March 17 (Reuters) - Gold tumbled 3% on Tuesday, while other
precious metals also extended heavy losses from the previous
session, as fears over the global economic toll from the
fast-spreading coronavirus prompted investors to dump most
assets and hoard cash.
Platinum and silver shed more than 6%, while palladium lost
over 4%. Industrial metals were worst hit in Monday's meltdown
on concerns of a global recession.
"Cash and bonds are king right now. It's just the place
where investors are seeing value in terms of what they hold,"
OANDA analyst Craig Erlam said, adding precious metals seemed to
be the go-to assets for investors liquidating positions.
"Investors hate uncertainty, but at the moment, we're
navigating completely blind. So that's why we're seeing so much
panic and unrest in the markets."
Spot gold XAU= was down 2.6% to $1,475.26 per ounce at
1204 GMT, having slumped as much as 5.1% on Monday to its lowest
since November 2019. U.S. gold futures GCcv1 were down 0.7% to
$1,475.70.
European stocks failed to rebound, following a sharp
sell-off in the previous session triggered by panic over
coronavirus and its impact on businesses and the economy. .EU
The dollar .DXY rose over 1% against rivals, making gold
more expensive for holders of other currencies. USD/
The contagion has killed more than 7,000 and infected more
than 182,260 people globally and forced countries and major
central banks to ramp up measures to protect their economies
from the outbreak. "We believe that a major new factor may weigh on the gold
price: the sharply falling oil prices and the increasingly
likely economic recession could spark fears among market
participants of a deflationary shock. That would be fatal for
gold," Commerzbank analysts said in a note.
Reflecting investor sentiment, holdings in the world's
largest gold-backed exchange-traded fund, SPDR Gold Trust GLD
fell 0.2% to 929.84 tonnes on Monday.
Palladium XPD= , meanwhile, fell 2% to $1,585 per ounce,
having plummeted as much as 18% in the previous session.
Platinum XPT= lost 4.2% to $635.37, having posted its biggest
one-day percentage decline ever on Monday.
The moves in autocatalysts platinum and palladium have been
particularly pronounced as they have outperformed the precious
metal market recently, said OANDA's Erlam.
Silver XAG= fell 3.9% to $12.40, after touching its lowest
since 2009 in the last session.