PRECIOUS-Gold eases on rising risk appetite as new virus cases fall

(Updates prices)
* Dollar hovers near four-month peak
* Epidemic may be over by April - China medical adviser
* SPDR Gold Trust ETF holdings jump to over 3-month high

By Asha Sistla
Feb 12 (Reuters) - Gold prices edged lower on Wednesday as
new coronavirus cases fell and risk appetite improved, although
uncertainty over the economic impact of the outbreak still
underpinned bullion.
Spot gold XAU= edged 0.2% lower to $1,564.15 per ounce by
0818 GMT. U.S. gold futures GCcv1 were down 0.2% at $1,567.50.
While the death toll exceeded 1,100, China's foremost
medical adviser on the epidemic said the infection may be over
by April, with the number of new cases already declining in some
places.
"Equity market is doing good, U.S. dollar is above 98.5 and
there is some rebound in base metals and energy markets that is
showing some increasing risk appetite in investors," said
Vandana Bharti, assistant vice-president of commodity research
at SMC Comtrade. O/R MET/L
The U.S. dollar stayed close to four-month highs after
soaking up safe-haven flows as worries about the coronavirus
coincided with recent data showing the U.S. economy's strength.
USD/
"Gold is consolidating as the current virus scare is
evaporating," Stephen Innes, chief market strategist at AxiCorp,
said.
Meanwhile, Asian stocks inched up as investors felt the
worst of the epidemic may have passed. MKTS/GLOB
Innes said the measures taken by Chinese authorities to
avoid large-scale layoffs were "keeping a lid on gold prices as
it would be positive for growth and bullish for equity markets".
However, he said the underlying support for gold remains due
to factors including the knock-on effects of the virus, the
impact of existing tariffs following the U.S.-China Phase 1
trade deal.
Chinese purchase of U.S. farm products this year under the
Phase 1 trade deal could drop, White House national security
adviser Robert O'Brien said. Meanwhile, Federal Reserve Chair Jerome Powell told Congress
on Tuesday the U.S. economy is in a good place, but cited the
potential threat from the epidemic and concerns about the
economy's long-term health. Gold, which is often used as an insurance against economic
risks, tends to appreciate on expectations of lower interest
rates, which reduce the opportunity cost of holding non-yielding
bullion.
Holdings of the world's largest gold-backed exchange-traded
fund SPDR Gold Trust GLD rose 0.67% to 922.23 tonnes on
Tuesday, its highest in over three months. GOL/ETF
Palladium XPD= slipped 0.5% to $2,329.34 an ounce, silver
XAG= fell 0.6% to $17.53 per ounce, and platinum XPT= shed
0.4% to $964.80.