PRECIOUS-Gold gains as grim economic outlook accelerates flight to safety

(Adds comment, details and updates prices)
* Investors await U.S. jobless claims data at 1230 GMT
* Japanese business confidence plunges to decade lows in
April
* U.S. retail sales collapse in March as virus batters
economy
* Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7
in an external browser

By Shreyansi Singh
April 16 (Reuters) - Gold rebounded after initial declines
on Thursday, bolstered by safe haven demand as weak retail sales
and manufacturing data out of the United States heightened fears
of a deep global recession due to the coronavirus.
Spot gold XAU= rose 0.4% to $1,722.02 per ounce by 0704
GMT, erasing losses driven by profit-booking and a stronger
dollar earlier in the session.
U.S. gold futures GCcv1 rose 0.9% to $1,755.50.
The overall upward trend for gold has not changed, said
Avtar Sandu, senior commodities manager at Phillip Futures.
"If you look at the bigger picture, (economic) data is bad,
which means you get another few more rounds of quantitative
easing, and central banks would definitely keep interest rates
low in this weak environment," he said.
U.S. retail sales suffered a record drop in March and output
at factories declined by the most since 1946, raising concerns
that the economy contracted in the first quarter at its sharpest
pace in decades as measures to control the spread of the virus
weighed. Japanese business confidence plunged to fresh decade lows in
April, while British retail spending slumped by more than a
quarter during the first two weeks of lockdown measures.
Governments and central banks around the world have
unleashed unprecedented fiscal and monetary stimulus and other
support for economies floored by the pandemic. Lower interest rates reduce the opportunity cost of holding
non-yielding bullion. Gold also tends to benefit from widespread
stimulus from central banks, as it is seen as a hedge against
inflation and currency debasement.
"While gold will continue to be in demand, sometimes
investors need funds to cover their margin calls, so losses in
other financial assets might lead to falls in the gold price,"
said John Sharma, economist at National Australia Bank.
World stock markets fell, while the dollar extended gains
after a plunge in U.S. retail sales and factory production and
increasing gloomy economic outlooks for Asia. MKTS/GLOB USD/
However, Jeffrey Halley, senior market analyst at OANDA,
said in a note that he was now unsure whether gold was still
correlating to stock markets or running its usual inverted
correlation to the U.S. Dollar.
"This evening's U.S. Initial Jobs data may give us more of a
clue to that quandary, with weak data almost certainly sending
Wall Street lower."
While gold usually gains from reduced risk appetite, the
metal has, on occasion, moved in tandem with stock markets
recently, with sharp selloffs in wider markets prompting
investors to sell precious metals to cover their losses
elsewhere.
The U.S. jobs data is due at 1230 GMT.
Palladium XPD= gained 1.7% to $2,216.56 an ounce, while
silver XAG= rose 0.2% to $15.51 per ounce and platinum XPT=
was up 1% to $787.27.