PRECIOUS-Gold gains on rise in Chinese coronavirus cases

(Updates prices)
* Dollar eases from four-month high, stocks falter
* Coronavirus death toll surges to daily record 242 in Hubei
* Palladium deficit expected in 2020 - Johnson Matthey

By Sumita Layek
Feb 13 (Reuters) - Gold gained on Thursday after a sharp
rise in new coronavirus cases and deaths in China dampened risk
sentiment, prompting investors to buy the metal.
Spot gold XAU= was up 0.6% at $1,574.50 per ounce at 1250
GMT and U.S. gold futures GCcv1 were 0.4% higher at $1,577.70.
"This spike in the numbers has just knocked the wind out of
the sizeable bet...So, we are seeing risk markets cool off and
gold is catching some bids," OANDA analyst Craig Erlam said.
After reports of a decline in new coronavirus cases, China
said there had been a record rise in deaths and cases under a
new diagnostic method, a potential threat to the global economic
outlook. A rally in stock markets reversed after health officials in
Hubei reported 242 people had died from the virus on Wednesday,
the fastest daily rise so far. MKTS/GLOB The dollar .DXY eased from a four-month peak against a
basket of currencies, further increasing gold's appeal. USD/
China's Hubei province also extended a work suspension and
asked all enterprises not to reopen before the end of Feb. 20.
"There will be spillover particularly through big export and
import markets ... but those impacts are going to be short-term
because once people start returning to their normal lives, the
economy will bounce back," Erlam said.
Federal Reserve Chair Jerome Powell on Wednesday reiterated
his confidence in the U.S. economic outlook, despite some drag
"soon" from the coronavirus epidemic. "We've got some short term support from this issue in China,
although factors such as low U.S. interest rates, higher market
volatility due to the late economic cycle and upcoming
presidential elections should continue to support gold," said
UBS commodities analyst Giovanni Staunovo.
Palladium XPD= shed 0.4% to $2,395.80 per ounce, having
hit a one-week high earlier in the session.
Rising demand from automakers pushed the palladium market to
its biggest deficit for five years in 2019 and the deficit is
expected to grow this year too, materials maker Johnson Matthey
said. Silver XAG= rose 1% to $17.64, while platinum XPT=
gained 0.2% to $963.14.