PRECIOUS-Gold prices ease as investors cover margins

(Updates prices)
* Wall Street pounded by growth fears
* U.S. Treasury yields and dollar drift lower
* More than 119,000 people infected by coronavirus globally

By Harshith Aranya
March 11 (Reuters) - Gold prices fell on Wednesday after
rising as much as 1.3% earlier in the session, as traders sold
the precious metal to cover margins for stock markets spooked by
the global spread of coronavirus.
Spot gold XAU= was down 0.4% at $1,642.98 per ounce by
01:40 p.m. EDT (1740 GMT), while U.S. gold futures GCcv1
settled 0.2% lower at $1,642.30.
U.S. stocks dived, largely erasing Tuesday's gains, as
traders were skeptical about President Donald Trump's stimulus
plan to cushion the impact from the coronavirus outbreak. .N
"The price action (in gold) is fairly range-bound. The virus
worries in equity markets continued to offer support," said Ryan
McKay, a commodity strategist at TD Securities. "Global central
banks are offering stimulus."
"At the same time, gold is being sold when equity markets
are having a bad day to cover margins. I think the story hasn't
changed that much over the couple of weeks," he added.
Globally, there are over 119,000 confirmed coronavirus
cases. The White House and Congress negotiated stimulus measures on
Tuesday, although there was no immediate sign of a deal.

Further supporting bullion, U.S. 10-year Treasury yields
resumed their slide back towards Monday's record low. US/
The U.S. Federal Reserve slashed benchmark interest rates in
an emergency move last week, and is expected to cut rates
further when it meets later this month. FEDWATCH
Gold tends to appreciate on expectations of lower rates,
which reduce the opportunity cost of holding non-yielding
bullion.
Earlier on Wednesday, the Bank of England made an emergency
rate cut and launched a package of other measures to combat a
coronavirus-driven economic slowdown. MKTS/GLOB The European Central Bank is also expected to unveil new
stimulus measures on Thursday. Meanwhile, holdings in the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust GLD , held near their
highest in more than three years. GOL/ETF
"ETFs are reflecting investment," said Soni Kumari, a
commodity strategist at ANZ, adding that the lower interest rate
environment and safe-haven demand were boosting inflows.
Elsewhere, palladium XPD= fell 4.4% to $2,312.62 per
ounce.
"It was quite surprising that palladium was able to
withstand massive headwinds from coronavirus for such a long
time, so now it feels the pain of it," Commerzbank analyst
Carsten Fritsch said, noting that declining car sales are
expected to weigh down the autocatalyst metal.
Platinum XPT= eased 0.2% to $866.87, while silver XAG=
fell 0.4% to $16.79 per ounce.