(Adds comment, updates prices)
* Palladium hits all-time high of $2,847.50/oz
* Gold could hit $1,700/oz over the next couple weeks-
analyst
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl
* Coronavirus interactive graphic: https://tmsnrt.rs/2GVwIyw
By Eileen Soreng and Harshith Aranya
Feb 27 (Reuters) - Gold pared gains on Thursday as investors
booked profits after prices climbed more than 1% earlier in the
session on mounting worries about how the coronavirus outbreak
might hurt the global economy.
Spot gold XAU= was up 0.4% at $1,645.59 per ounce by 2:20
p.m. EST (1920 GMT). Prices have retreated since hitting a
seven-year peak of $1,688.66 on Monday.
U.S. gold futures GCcv1 settled little changed at
$1,642.50.
"Much of the recent rally have been caused by safe haven
flows which could be very quick and very difficult to absorb if
sentiments were to shift," said Daniel Ghali, commodity
strategist at TD Securities.
"Everybody has bought gold and is looking to sell and that
is keeping it from rallying further despite the fact equities
have continued to sell off."
Investors fleeing risk dumped stocks with Wall Street's main
indexes tumbling for the sixth straight session, while U.S.
Treasury yields hit record lows. .N
"No one knows what the impact (of the coronavirus) will be.
It's clearly reducing economic activity in many parts of the
world," said Jeffrey Christian, managing partner of CPM Group.
In response, global central banks "will be more inclined to
accommodate things with lower interest rates and increase buying
of bonds to increase liquidity. They'll do whatever they need to
minimize the damage being caused by this."
Money markets are now fully pricing in one 25 basis point
cut in the U.S. central bank rate by April and three by March
2021. FEDWATCH Other major central banks are also expected to
cut rates.
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion.
"Gold will eye the $1,700 an ounce level over the next
couple weeks as the coronavirus outbreak worsens," said Edward
Moya, a senior market analyst at broker OANDA.
New coronavirus infections around the world in the past 24
hours surpassed those in mainland China, for the first time. A
vaccine may take up to 18 months to develop. On Thursday, China reported a rise in new virus cases on
Feb. 26 from the previous day. Among other precious metals, palladium was up 1.4% at
$2,828.61, having scaled an all-time record peak of $2,847.50
per ounce earlier in the session.
Nornickel, the world's largest palladium producer, said it
expects a deficit in the global palladium market of 0.9 million
ounces in 2020. Platinum XPT= fell 0.8% to $903.26, after touching its
lowest since December, while silver XAG= was down 0.7% to
$17.76 an ounce.
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Gold and risk assets https://tmsnrt.rs/3cfwKzx
Palladium and platinum https://tmsnrt.rs/3addeSn
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