PRECIOUS-Gold scales two-week peak as virus fears fuel safe-haven bids

(Updates prices)
* U.S. confirms second case of coronavirus
* U.S. 10-year Treasury yields fall to two-week low
* Palladium sheds 3% en route to first weekly loss in 5

By Harshith Aranya
Jan 24 (Reuters) - Gold jumped to a more than two-week high
on Friday as the latest updates on the coronavirus dented risk
sentiment, and prompted a flight into safe-haven assets.
Spot gold XAU= was up 0.7% at $1,573.53 per ounce by 1:41
p.m. EST (1841 GMT), having hit a peak since Jan. 8 of $1,575.03
earlier in the session.
The metal was up 1% for the week so far.
U.S. gold futures GCv1 settled 0.4% higher at $1,571.90
per ounce.
"The entire market just switched into risk-off mood," said
Bart Melek, head of commodity strategies at TD Securities.
The U.S. Centers for Disease Control and Prevention
confirmed a second U.S. case of the coronavirus in the country,
denting appetite for riskier assets. MKTS/GLOB
This comes after the World Health Organization (WHO)
designated the coronavirus outbreak an emergency for China but
not for the rest of the world currently, and added it was
tracking it "every minute." The spread of the virus ahead of this weekend's Lunar New
Year, a peak period of travel in China has kept investors
concerned.
"Mounting concerns about the virus ahead of the weekend are
driving accumulation of gold. ... Clearly, the headlines will
get worse before they get better," said Tai Wong, head of base
and precious metals derivatives trading at BMO.
Further developments surrounding the outbreak and a U.S.
Federal Reserve meeting on Jan. 28-29 will be key drivers for
gold into next week, Wong added.
Keeping with a global trend of accommodative monetary
policy, the European Central Bank left rates unchanged on
Thursday.
Gold is highly sensitive to any reduction in interest rates,
which decreases the opportunity cost of holding non-yielding
bullion.
Also helping non-interest-bearing bullion, U.S. 10-year
Treasury yields fell to a two-week low. US/
Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust GLD , rose 0.2% to 900.58 tonnes on
Thursday. GOL/ETF
Elsewhere, palladium XPD= slipped 1.8% to $2,417.10 per
ounce, having shed more than 3% earlier in the session; and was
on track to register its first weekly fall in five at about
2.6%.
Platinum XPT= rose 0.4% to $1,005.95, but was down 1.3%
for the week so far.
Silver XAG= gained 1.8% to $18.11 per ounce, and had risen
about 0.6% so far this week.