PRECIOUS-Gold back above $1,600/oz as Apple's virus warning lifts safety demand

(Updates prices)
* World stocks knocked off record highs
* Palladium hits fresh record high of $2,592.02/oz
* Silver, platinum rises over 2%
* Dollar climbs to over 4-month high

By Brijesh Patel
Feb 18 (Reuters) - Gold surged over 1% on Tuesday to fetch
more than $1,600 an ounce as Apple Inc's AAPL.O surprise
warning about the impact of the coronavirus outbreak fueled
concerns about global economic weakness, driving investors to
lower-risk assets.
Palladium notched an all-time high, driven by short supplies
of the auto-catalyst metal.
Spot gold XAU= was up 1.3% at $1,601 per ounce as of 1:55
p.m. EST (1855 GMT) after hitting $1,605.10, the highest since
Jan. 8, earlier in the session.
U.S. gold futures GCv1 settled 1.1% higher at $1,603.60 an
ounce.
"The equity markets are under pressure and gold is still
being viewed as a quintessential safe-haven asset as we do get
some negative news in this case in regards to coronavirus and
its effects on the global economy," said David Meger, director
of metals trading at High Ridge Futures.
Apple, the world's most valuable technology company, said it
was unlikely to meet its March-quarter sales forecast because
the coronavirus outbreak was pressuring its supply chain.
The surprise sales warning knocked global equities off
record highs and fed buying of safe-haven assets. MKTS/GLOB
"There are concerns that this whole coronavirus situation
may be little worse than many expected and the implication is
that central banks around the world will be somewhat more dovish
and the market is staring to price this reality in," said Bart
Melek, head of commodity strategies at TD Securities.
China's central bank cut the interest rate on its
medium-term loans on Monday as policymakers sought to reduce the
economic shock from the virus outbreak. The death toll in China had climbed to 1,868, the National
Health Commission said, and the World Health Organization said
"every scenario is still on the table" in terms of the
epidemic's evolution. "Gold continues to make these moves sideways to higher in
the midst of a traditionally firmer dollar which has the
tendency to limit or cap commodities moves shows how strong the
gold market is," High Ridge Futures' Meger said.
The dollar index .DXY climbed to a more than four-month
high against key rivals, also gaining from safe-haven interest.
USD/
Palladium XPD= gained 2.8% at $2,592 an ounce, after
hitting an all-time high of $2,592.02.
"This can be only partly explained by the ongoing
production problems in South Africa due to power supply
disruptions and this year's renewed high supply deficit,"
Commerzbank analysts said in a note.
Silver XAG= rose 2.2% to $18.16 per ounce, while platinum
XPT= surged 2.3% to $991.22.

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