PRECIOUS-Gold gains on virus risks, but uptick in equities caps gains

(Adds comment and updates prices)
* Euro zone markets price in 90% chance of ECB rate cut next
week
* Gold looks neutral in a range of $1,631-$1,653/oz
-technicals
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl

By Asha Sistla
March 5 (Reuters) - Gold edged higher on Thursday on
safe-haven buying fuelled by worries about the fast-spreading
coronavirus outbreak, but a rise in equity markets limited
bullion's gains.
Spot gold XAU= was up 0.2% at $1,637.89 per ounce by 0754
GMT. U.S. gold futures GCcv1 were down 0.3% at $1,638.70.
"(The virus) has spread to over 80 countries and tensions
are escalating day-by-day; investors don't know what will happen
next and they prefer investing in gold because of its safe-haven
appeal," said Hareesh V, head of commodity research at Geojit
Financial Services.
Virus-related geopolitical uncertainties are supporting gold
despite firming equity markets, he added.
Asian shares rose on Thursday, tracking overnight gains on
Wall Street following the strong performance of former U.S. Vice
President Joe Biden in the Democratic nomination campaign.
MKTS/GLOB "If this (equity) rally continues for three-four days,
markets could take that as an all-clear in terms of economic
impact of the virus and we might see pressure on gold. It's a
very volatile situation," said Michael McCarthy, chief market
strategist at CMC Markets.
The International Monetary Fund said on Wednesday the global
spread had crushed hopes for stronger growth this year, while a
Fed report showed there were signs the epidemic had begun to
weigh on business sentiment in the United States as well.
The U.S. Federal Reserve's surprise interest rate cut on
Tuesday to shield the world's largest economy from the economic
impact of the epidemic also supported non-yielding bullion.
Investors are now waiting to see whether the European
Central Bank would also announce new stimulus, with euro zone
markets pricing in a 90% chance of deposit rate reduction next
week.
Spot gold looked neutral in a range of $1,631-$1,653 per
ounce, Reuters technical analyst Wang Tao said. TECH/C
In other metals, palladium XPD= slid 2.6% to $2,509.98 per
ounce.
"The auto sector supply chain will be impacted by COVID-19.
Although, this demand shock is expected to have limited impact
on palladium due to structural deficit backdrop, we see room for
further setbacks following the recent rally," ANZ Bank analysts
said in a note.
The autocatalyst metal slumped as much as 13% on Feb. 28,
following a record run to an all-time high of $2,875.50 on Feb.
27 due to a stark supply shortfall.
Silver XAG= inched down 0.1% to $17.16 per ounce, while
platinum XPT= shed 0.3% to $870.10.

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