PRECIOUS-Gold gains as virus-led growth fears spur safe-haven buying

(Updates Prices)
* S.Africa's three-week shutdown hits platinum output
* Global coronavirus death toll close to 34,000
* Graphic - Coronavirus unknowns: https://reut.rs/2UHIgvz

By Brijesh Patel
March 30 (Reuters) - Gold prices rose on Monday as investors
sought safe havens amid fears over growing economic damage from
the coronavirus after governments extended lockdowns to curtail
its spread.
Spot gold XAU= was up 0.3% at $1,621.89 an ounce by 1145
GMT. U.S. gold futures GCv1 edged 0.1% higher to $1,625.70.
"Volatility due to COVID-19 is back in the markets. Gold
profited a bit from safe-haven buying after stock markets
dropped in Europe," said Quantitative Commodity Research analyst
Peter Fertig.
"In the near term, gold should be supported by safe-haven
buying, but if stock markets drop deeper, selling of gold to
meet margin calls could re-emerge."
Investor appetite for riskier assets remained weak as fears
mounted that the global coronavirus shutdowns could last for
months, sending European shares lower for a second session and
oil prices to their weakest in 17 years. MKTS/GLOB O/R
The pandemic has already driven the global economy into
recession and countries must respond with "very massive"
spending to avoid a cascade of bankruptcies and emerging market
debt defaults, the head of the International Monetary Fund
warned on Friday. Central banks have rolled out a wave of fiscal and monetary
measures to stem the economic hit from the virus, with China,
Singapore and New Zealand the latest to add stimulus.
More than 720,000 people have been infected by the virus
across the world and 33,969 have died, according to a Reuters
tally. The U.S. House of Representatives last week approved a $2.2
trillion aid package — the largest in history — to help cope
with the virus-inflicted economic downturn. Lower interest rates and looser economic policy tend to
benefit gold because they cut the opportunity cost of holding
non-yielding assets.
However, safe-haven gains for the U.S. dollar capped gold's
rise, with the dollar index .DXY up 0.6%. USD/
"The huge amount of liquidity that the U.S. Federal Reserve
is going to send into the markets has been unable to generate
further gold rallies, but the scenario could quickly change,"
ActivTrades chief analyst Carlo Alberto De Casa said in a note.
Elsewhere, palladium XPD= fell 2.1% to $2,222.42 an ounce,
platinum XPT= dropped 1.9% to $727.08 and silver XAG=
slipped 3.3% to $14.
"Negative impact from COVID-19 on the industrial sector is
weighing on platinum and palladium prices. Longer lockdowns mean
less demand for PGMs from car producers," said Quantitative
Commodity Research's Fertig.
Platinum producer Sibanye-Stillwater SSWJ.J said it would
declare force majeure on supply contracts for platinum group
metals (PGMs) after the temporary closure of its South African
mines to comply with a three-week national lockdown.
Impala Platinum IMPJ.J has also declared force majeure, a
source with direct knowledge of the matter said.