PRECIOUS-Gold rebounds as virus spread fuels rate cut hopes

(Updates prices)
* SPDR gold holdings highest since November 2016
* Platinum hits two-month low
* Silver gains after last session's steep fall
* Coronavirus interactive graphic: https://tmsnrt.rs/2GVwIyw

By Swati Verma
Feb 26 (Reuters) - Gold rebounded on Wednesday, a day after
it posted its biggest one-day decline in nearly four months, as
the coronavirus scare spurred safe-haven flows towards bullion
and raised hopes of interest rate cuts by major central banks.
Spot gold XAU= rose 0.5% to $1,643.70 per ounce by 1302
GMT, having slumped as much as 1.9% in the previous session as
investors took profits. U.S. gold futures GCcv1 eased 0.2% to
$1,646.
"It is a typical flight into safe havens after the
coronavirus has spread not only to the Asian countries but also
to Italy and Middle East," said Peter Fertig, an analyst at
Quantitative Commodity Research.
"There's a possibility that the safe-haven has not yet
reached its peak. The economic impacts have to be stronger than
the market is currently pricing in. There is already a certain
possibility for another Fed rate cut by 25 basis points."
Investors have pushed up expectations for rate cuts from the
U.S. Federal Reserve and European Central Bank. China's central
bank has also vowed it will take further steps to support the
virus-hit economy.
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion.
Gold is up more than 3% so far this month, having hit a
7-year high of $1,688.66 an ounce earlier this week as the
rapidly spreading coronavirus aggravated fears of an economic
slowdown.
The United States alerted Americans on Tuesday to begin
preparing for the spread of coronavirus in the country as
outbreaks in Iran, South Korea and Italy escalated.
The effects of the outbreak are likely to reverberate beyond
China as most major economies in the region are expected to
either slow significantly, halt or shrink in the current
quarter, Reuters polls found. lifting demand for gold, global stocks tumbled for
the fifth straight day, while U.S. bond yields held near record
lows. MKTS/GLOB US/
"In this environment, gold remains in considerable demand as
a safe haven and crisis currency. It recouped some of its
initially high losses yesterday ... profiting from ongoing ETF
inflows," Commerzbank analysts wrote in a note.
Holdings in the SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, climbed to the highest since
November 2016 at 940.09 tonnes on Tuesday. GOL/ETF
Among other precious metals, palladium XPD= gained 1.4% to
$2,735.73 per ounce, while platinum XPT= fell 0.4% to $921.91,
having touched its lowest in two months earlier.
Silver XAG= rose 0.2% to $18.03 an ounce, having fallen as
much as 4.1% in the previous session.

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Gold jumps amid rise in coronavirus cases globally https://tmsnrt.rs/37Vi712
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