(Updates prices, adds U.S. gold settlement)
* Gold rebounds after sliding 4.6% on Friday
* Platinum down for an eighth straight session
* U.S. 10-year Treasury yield falls to record low
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl
By Harshith Aranya
March 2 (Reuters) - Gold rose nearly 1% on Monday after
suffering its largest daily fall in nearly seven years, as
expectations grew for policy easing by the U.S. Federal Reserve
and other central banks to help boost the coronavirus-hit global
economy.
Spot gold XAU= was up 0.4% at $1,591.84 an ounce by 1:40
p.m. EST (1840 GMT), and U.S. gold futures GCv1 settled 1.8%
higher at $1,594.80.
On Friday, the precious metals market was routed by traders
liquidating their positions amidst a coronavirus-led selloff
across global markets, with gold diving as much as 4.5%.
"We are seeing a little bit of recovery from late last week,
(when) there was lot of selling to generate liquidity and cover
margins," said Ryan McKay, a commodity strategist at TD
Securities.
"There are lot of expectations on interest rate cuts from
the Fed, and also cuts from other global central banks ...
offering very good support."
The U.S. central bank will "act as appropriate" to support
the economy on the backdrop of the virus outbreak, Chair Jerome
Powell said on Friday. Futures now imply a full 50 basis-point rate cut 0#FF: at
the Fed's March 18 monetary policy meeting.
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion and also weigh on U.S. yields and the
dollar.
The world economy is set to grow only 2.4% this year, the
lowest rate since 2009, the Organisation for Economic
Co-operation and Development stated on Monday. Stephen Innes, chief market strategist at financial services
firm AxiCorp, said the negative correlation between the U.S.
currency and gold has reappeared since the dollar's safe-haven
appeal has faded.
The dollar index .DXY slid on bets that the Fed is likely
to ease policy, while implied yields on the U.S. 10-year
Treasury futures TYv1 traded below 1% for the first time.
[ USD/ US/
Palladium XPD= slipped 2.9% to $2,519.39 an ounce, having
plunged as much as 13% on Friday, the most since the 2008
financial crisis.
Platinum XPT= dipped 0.6% to $858.42, while silver XAG=
rose 0.3% to $16.72, after both fell to their lowest levels in
about six months in the previous session.
Platinum is on track to end lower for an eighth straight
session.
"Car sales growth is an important driver for the platinum
price, particularly sales in Europe," said UBS commodities
analyst Giovanni Staunovo.
"The falling share of newly sold diesel cars (which use
platinum in their catalytic converters) in Europe is another
drag on the white metal."
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Graphic-Safe haven rush: gold versus dollar https://tmsnrt.rs/388cUmI
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