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PRECIOUS-Gold climbs to 7-yr high as virus woes boost safety demand

Published 02/20/2020, 09:02 PM
© Reuters.  PRECIOUS-Gold climbs to 7-yr high as virus woes boost safety demand
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(Recasts, updates prices)
* Coronavirus fears grip South Korea, China reports drop
* Palladium eases from record high
* SPDR Gold holdings rise to over 3-yr peak
* Resistance in gold at around $1,613-15/oz-analyst
* Coronavirus interactive graphic: https://tmsnrt.rs/2GVwIyw


By Sumita Layek
Feb 20 (Reuters) - Gold prices rose to their highest level
in seven-years on Thursday as investors sought safe haven assets
after a rise in the number of new coronavirus cases in South
Korea added to worries over the global economic impact of the
outbreak.
Spot gold XAU= was up 0.4% at $1,617.52 per ounce by 1227
GMT, its highest since Feb. 2013.
U.S. gold futures GCcv1 rose 0.6% to $1,620.50.
"As long as the coronavirus problem is in the headlines,
gold prices will be very well supported at current levels, if
the situation deteriorates prices can even go higher," said SP
Angel analyst Sergey Raevskiy.
We were seeing some profit taking after the last run up in
the prices, but overall the environment is very favourable for
gold prices, he added.
Even as the number of new coronavirus cases in China slowed,
a spike in new infections and a first death in South Korea
intensified fears that the disease could spread more widely.
European shares eased from record highs after a raft of
disappointing earnings and concerns over the impact of the virus
weighed on sentiment. .EU
China cut the benchmark lending rate and banks in Shanghai
have issued 1.31 billion yuan ($186.8 million) in cheap loans to
48 key firms to support an economy jolted by the crisis.
The world's second largest economy is likely to roll out
more support measures, analysts said.
U.S. Fed policymakers also acknowledged new risks caused by
the epidemic, but were cautiously optimistic about their ability
to hold interest rates steady this year, minutes of the central
bank's last policy meeting showed on Wednesday. "Gold is being driven chiefly by robust investment demand:
gold ETFs registered inflows for the 21st day of trading in a
row yesterday, and speculative financial investors are likely to
have further expanded their net long positions as well,"
Commerzbank analysts said in a note.
Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust GLD , rose 0.2% to 931.60 tonnes on
Wednesday, their highest since November 2016. GOL/ETF
On the technical front, "$1,600 an ounce is a good support
(for gold), while resistance lay at $1,613-$1,615," said Afshin
Nabavi, senior vice president at precious metals trader MKS SA.
Elsewhere, palladium XPD= fell 0.8% to $2,691.85 an ounce,
having touched a record high of $2,841.54 in the previous
session on supply deficit concerns.
Silver XAG= was steady at $18.40, while platinum XPT=
slipped 0.7% to $998.50.

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