PRECIOUS-Gold soars more than 2.5% as virus triggers flight to safety

(Updates prices, adds graphic)
* Europe's STOXX 600 falls more than 3%
* U.S. 10-yr Treasury yield falls to lowest since July 2016
* Coronavirus interactive graphic: https://tmsnrt.rs/2GVwIyw
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl

By Sumita Layek
Feb 24 (Reuters) - Gold prices surged more than 2.5% to over
seven-year highs on Monday as the spread of coronavirus outside
China and its potential impact on global economic growth spurred
safe haven buying.
Spot gold XAU= was up 2.3% at $1,681.84 per ounce by 1250
GMT after hitting $1,688.66, its highest level since January
2013. U.S. gold futures GCcv1 were up 2.2% to $1,684.30.
Gold in euros XAUEUR=R hit an all-time peak of 1,560.39
euros per ounce, while gold priced in sterling XAUGBP=R rose
to a record high of 1,308.45 pounds an ounce.
"Beyond the near term disruptions to global supply chains,
the coronavirus could have an effect on headline GDP," said FXTM
market analyst Han Tan.
"On the onset of 2020 we were optimistic that global
economic conditions were able to recover on signs of subsiding
trade tensions, but the potential fallout from the coronavirus
not only triggers risk aversion, but could also erode the growth
potential for the full year."
European shares tumbled more than 3% after a sharp rise in
new infections in South Korea, Italy and Iran exacerbated
worries of a wider spread of the virus.
MKTS/GLOB
The World Health Organization said it is worried about the
growing number of cases without any clear link to China.

"There seems to be a mix of short covering and a fear of
missing out driving the gains (in gold), with $1,660 well
supported on any pullbacks," MKS PAMP said in a note.
"Expect demand to remain firm through $1,660-$1,650, while
there's little top-side resistance on the way to $1,700."
The U.S. dollar .DXY also gained on increasing interest in
safe haven assets.
The benchmark U.S. 10-year Treasury yield US10YT=RR fell
to its lowest level since July 2016. US/ USD/
Investors are also expecting global central banks to further
ease monetary policy as the risks from the virus threaten global
growth. Lower interest rates reduce the opportunity cost of
holding gold and tend to weigh on U.S. yields.
Reflecting increased investor interest in bullion,
speculators raised their bullish positions on COMEX gold and
silver contracts in the week to Feb. 18, data showed on Friday.
CFTC/
Mirroring gold's gains, silver XAG= rose 1.6% to $18.76 an
ounce, having hit its highest since September at $18.90.
Palladium XPD= eased 1.3% to $2,668.52 per ounce, while
platinum XPT= shed 0.6% to $968.01.

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Coronavirus fears spark flight to safety https://tmsnrt.rs/2vZVMSR
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