PRECIOUS-Gold rises 1% as coronavirus fears drive investors to safe haven

(Updates prices)
* Euro zone markets price in ECB rate cut next week
* U.S. 10-year treasury yield fall back below 1%
* GRAPHIC-2020 asset returns: https://tmsnrt.rs/2jvdmXl

By Harshith Aranya
March 5 (Reuters) - Gold prices rose on Thursday as
coronavirus cases continued to spread around the world,
exacerbating concerns about the global economic impact of the
epidemic and prompting investors to seek refuge in the
safe-haven metal.
Spot gold XAU= was up 1% at $1,651.41 per ounce by 1235
GMT. U.S. gold futures GCcv1 rose 0.6% to $1,652.40.
"The virus is really taking over ... I think the markets are
a bit nervous, (gold is) more prone to higher prices and is well
supported on the downside," said Afshin Nabavi, senior vice
president at precious metals trader MKS SA.
"At the moment, it looks like it's going to have very
negative effects on businesses, tourism, travel and smaller
businesses. So I think the economy is going to be hurting big
time."
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 U.S. business sentiment. European shares fell again on Thursday, taking their cue
from U.S. equity futures, which implied a lower open for Wall
Street as cases of the coronavirus surged in the United States.
MKTS/GLOB
The American coronavirus death toll rose to 11 on Wednesday,
and California declared a state emergency. U.S. lawmakers have
approved an $8.3 billion emergency bill to help contain the
virus. There are now more than 90,000 COVID-19 coronavirus cases
globally, with over 3,000 deaths.
The European Central Bank is expected to cut interest rates
by 10 basis points next week, joining its peers in the United
States, Canada and Australia.
The dollar .DXY eased against rivals, making gold cheaper
for holders of other currencies, while the U.S. 10-year treasury
yield fell back below 1%. USD/ US/
Meanwhile, palladium XPD= slid 3.3% to $2,491.99 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 a 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 the day
before due to a stark supply shortfall.
Silver XAG= was up 0.7% to $17.30 per ounce, while
platinum XPT= shed 1% to $863.92.