(Updates prices)
* Platinum on track for worst day on record
* Silver hits lowest since 2009, palladium weakest since
end-Aug
* Fed slashes rates for second time this year
By Brijesh Patel
March 16 (Reuters) - Platinum plunged nearly 27% on Monday
to its weakest level since 2002, while gold dived over 5% as
investors unloaded precious metals in exchange for cash after a
second emergency U.S. rate cut failed to quell coronavirus fears
across markets.
Palladium XPD= dropped 11% to $1,609.45 per ounce, having
hit its lowest since end-August at $1,481.53. Silver XAG=
slumped 12.5% to $12.84 after touching $11.76, a level last seen
in 2009.
By 2:11 p.m. EDT (1811 GMT), platinum XPT= was down 13.7%
at $656.98 per ounce, on track for its biggest one-day decline
on record, while gold slipped 2.6% to $1,490.01. U.S. gold
futures GCcv1 settled 2% lower at $1,486.5.
"It's the liquidity selling that continues to be the norm
here," said Ryan McKay, a commodity strategist at TD Securities.
"It is similar to what happened in the financial crisis where
gold actually traded quite lower for a number of months along
with equities."
Gold also broke below the 200-day moving average, which is
regarded as a bearish sign.
Precious metals joined a wider market sell-off as the
coronavirus continued to spread rapidly, with some investors
obliged to sell assets to cover margin calls.
"It's a continued hunt for cash for liquidity. Everything is
being sold, market participants are throwing in the towel just
leaving the exits," Commerzbank analyst Carsten Fritsch said.
U.S. government bonds yields fell, stock markets tumbled and
oil prices plunged. US/ .N O/R "On top of that we have industrial components weighing on
the likes of silver, platinum and palladium," McKay said.
"In this environment, the auto market is going to be very
weak as we saw in China, and industrial demand is clearly on the
downside. We are looking at potential recession type
environment." Autocatalyst metals platinum and palladium are particularly
sensitive to expectations of falling car sales.
The coronavirus has claimed over 6,500 lives worldwide and
triggered panic across markets, prompting central banks across
the globe to push through support measures to temper the
economic fallout. Central banks in Japan, Australia and New Zealand joined the
U.S. Federal Reserve in announcing dramatic monetary easing in a
coordinated effort not seen since the 2008 financial crisis.
On the physical demand side, activity remained subdued in
major Asian hubs due to virus outbreak, especially in the
world's biggest gold consumer, China. GOL/AS
Holdings in the SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, fell to 931.59 tonnes on
Friday. GOL/ETF
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Gold falls below its 200-day moving average https://tmsnrt.rs/3d30GPV
Palladium's premium to platinum https://tmsnrt.rs/2IPecJd
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