PRECIOUS-Gold down in thin holiday trade as China seeks to limit virus impact

(Recasts, updates prices)
* Further rallies in gold will need fresh impetus-analyst
* Palladium rises over 3%
* Trading subdued due to the U.S. holiday
* Dollar hovers close to a four-month peak

By Sumita Layek
Feb 17 (Reuters) - Gold prices eased in a thin volume trade
on Monday as risk appetite improved after China took further
efforts to limit the economic impact from the coronavirus
outbreak.
Spot gold XAU= was down 0.2% at $1,581.38 per ounce by
10:21 a.m. EST (1521 GMT). U.S. gold futures GCcv1 edged 0.1%
lower to $1,584.50. Trading was subdued due to a public holiday
in the United States.
"While the optimism in stock markets is rather evident that
this outbreak may be transitory and that a pivot point is near,
however the gold investors are yet not willing to join whole
heartedly in the equities game," said FXTM market analyst Han
Tan.
Gold earlier in the session was hovering near Friday's near
two-week high of $1,584.65, but pared gains as global shares
rose after China cut the interest rate on its medium term loans
in an attempt to counteract the economic hit from the epidemic.
MKTS/GLOB
This comes after the country's central bank in early
February announced an injection of 1.2 trillion yuan ($174
billion) worth of liquidity into the markets.
The dollar .DXY hovered close to a four-month peak scaled
in the previous session, making gold relatively expensive for
holders of other currencies. USD/
"Given that gold prices remain elevated above $1,550's and
that Asian currencies remain weaker to the U.S. dollar ... it
shows that there is still a fair amount of concern among
investors about the potential fallout for the global economy
from this outbreak," Tan said.
Gold in euros XAUEUR=R hit a record peak of 1,463.98 euros
per ounce earlier in the session.
The virus outbreak has claimed 1,770 lives so far and has
threatened economic growth in the world's second largest
economy. Major Asian financial hubs too are grappling with the impact
from the virus as the public health crisis pushed Singapore to
downgrade its 2020 economic growth forecast and has heightened
the risk of recession in Japan. "The main trend remains positive but for further rallies we
would need some fresh impetus, as stock markets are still in a
risk on scenario," ActivTrades chief analyst Carlo Alberto De
Casa said in a note.
"The first resistance is now placed at $1,585, followed by
$1,592 and by the psychological threshold of $1,600."
Elsewhere, palladium XPD= rose 2.6% to $2,493.77 an ounce,
silver XAG= gained 0.3% to $17.78, while platinum XPT=
climbed 0.5% to $967.92.