PRECIOUS-Gold dips 1% on expected global measures to soften virus blow

(Updates prices)
* European shares gain, dollar firms
* Japan unveils $4 bln economic package
* SPDR Gold holdings rise to highest since October 2016

By Sumita Layek
March 10 (Reuters) - Gold prices fell more than 1% on
Tuesday, pulling back after breaching $1,700 in the previous
session, as risk sentiment improved and the dollar firmed on
expected global support measures to soften the economic impact
from the coronavirus.
Spot gold XAU= lost 1% to $1,662.56 an ounce by 1206 GMT.
U.S. gold futures GCv1 fell 0.7% to $1,663.70.
"It's the stabilisation in financial markets; we see gains
in stock markets, yields are edging up, dollar is up. So factors
which had supported gold in the last few days are now turning
negative for it," said Quantitative Commodity Research analyst
Peter Fertig.
Stimulus hopes and recovering crude oil prices are also
leading to a recovery for risky assets and a move out of safe
havens, Fertig added.
Bullion rose as much as 1.7% on Monday to its highest since
December 2012 at $1,702.56 after a rout in global equity markets
on fears over the coronavirus and a crash in crude oil prices
triggered by a price war between top producers Saudi Arabia and
Russia. O/R
U.S. President Donald Trump said he would take steps to
bolster the economy and Japan unveiled a second package of
measures worth about $4 billion to cope with fallout from the
virus outbreak.
European shares rose and bond yields increased from record
lows on stimulus hopes while the dollar .DXY firmed against
rivals. MKTS/GLOB US/ USD/
However, investors remained cautious as total global
infections touched 111,600 by Monday.
Apart from the virus-led uncertainty, the global
implications of the oil price war would also support gold in the
near term, said FXTM market analyst Han Tan.
"I wouldn't be surprised if gold makes another run for
$1,700 ... triggered by further signs of the outbreak worsening
or as we get confirmation in hard data that major economies are
wilting under the weight of this outbreak."
Investors are now focused on a European Central Bank policy
meeting on Thursday, where it is expected to follow the U.S.
Federal Reserve by easing interest rates. Markets are also
expecting another cut at the Fed's March 18 meeting. FEDWATCH
Holdings in the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust GLD , rose to 30.99 million ounces, its
highest since October 2016. GOL/ETF
In other precious metals, palladium XPD= fell 2.5% to
$2,428.30 an ounce, silver XAG= gained 0.7% to $17.08 and
platinum XPT= rose 2.6% to $885.01.

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Gold gains on global spread of coronavirus https://tmsnrt.rs/2vWpbNQ
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