PRECIOUS-Gold inches lower as new coronavirus cases dip

(Updates prices)
* Dollar index at four-month high
* Markets focus on U.S. Fed Chair's testimony before
Congress
* Gold denominated in euros slips from record highs

By Sumita Layek
Feb 11 (Reuters) - Gold edged lower on Tuesday as European
stocks surged to record highs and the dollar hit a four-month
peak, after a fall in the number of new confirmed cases of
coronavirus limited the appetite for lower risk assets and drove
buying elsewhere.
Spot gold XAU= was down 0.1% at $1,569.80 per ounce by
1301 GMT, having touched its highest since Feb. 4 at $1,576.76
on Monday. U.S. gold futures GCcv1 shed 0.4% to $1,573.40.
"Equities are recovering and the Chinese economy is trying
to come back to normal... so it's not surprising to see
risk-averse investments like gold coming under pressure," said
Commerzbank analyst Eugen Weinberg.
With expectations of virus risks diminishing, "the impact to
the Chinese economy and to some extent the world economy is
likely to be only temporary," he said.
European shares hit a record high, while Asian share markets
followed Wall Street higher on Tuesday as the number of new
coronavirus cases slowed in China and the country's factories
slowly returned to work. .EU MKTS/GLOB
China's virus epidemic may peak in February and then plateau
before easing, the government's top medical adviser on the
outbreak said. The virus in the world's second-largest economy has killed
more than 1,000 so far and threatened the country's economic
growth as companies struggled to return to work after an
extended Lunar New Year holiday. Further weighing on gold, the dollar .DXY rose to its
highest since early October against a basket of rivals, making
assets priced in the U.S. unit more expensive for holders of
other currencies. USD/
Meanwhile, gold in euros XAUEUR=R eased from a record peak
of 1,444.76 euros per ounce hit in the previous session.
"We've this ad-hoc, completely unexpected (virus) factor
driving demand for gold, but ultimately the growth prospects are
being revised down (and) central banks are still continuing to
ease their monetary policy, so the drivers for higher gold
prices are there," said SP Angel analyst Sergey Raevskiy.
Market participants were focused on Federal Reserve Chair
Jerome Powell's testimony before Congress, after two Fed
policymakers played down the impact of the virus on the domestic
economy. Last month, Powell flagged the virus outbreak as
significant, with effects on the Chinese economy at least in the
short term. Among other precious metals, palladium XPD= fell 1.1% to
$2,327.05 an ounce, silver XAG= eased 0.1% to $17.74 and
platinum XPT= edged 0.1% higher to $967.09.