March 16, 2020 / 1:20 AM / 25 days ago

PRECIOUS-Gold jumps as emergency Fed rate cut weighs on dollar, equities

    March 16 (Reuters) - Gold prices rose nearly 3% on Monday,
following a steep decline in the previous session, as the dollar
and global equities fell sharply after the U.S. Federal Reserve
made another surprise interest rate cut.
    
    FUNDAMENTALS
    * Spot gold        was up 1.4% at $1,550.26 per ounce by
0030 GMT, having risen as much as 2.8% earlier. The metal fell
3% on Friday.
    * U.S. gold futures        rose 2.4% to $1,553.30 per ounce.
    * The Fed slashed rates back to near zero, restarted bond
buying and joined other central banks to ensure liquidity in
dollar lending to help put a floor under a rapidly
disintegrating global economy amid the coronavirus pandemic.
                        
    * Stock markets and the dollar fell heavily, after emergency
rate cuts in the United States and New Zealand failed to allay
fears about the coronavirus' economic shock.                  
    * New Zealand's central bank slashed interest rates by 75
basis points to a record low following an emergency meeting as
it prepared for a "significant" hit to the economy from the
virus.             
    * Lower interest rates reduce the opportunity cost of
holding non-yielding bullion.
    * The benchmark U.S. 10-year Treasury yields fell, resuming
its march towards an all-time low touched last week.      
    * European Union finance ministers plan to agree on Monday
on a coordinated economic response to the epidemic, with the
European Commission forecasting the effects of the virus could
push the EU into a recession.             
    * Manufacturing in Britain weakened sharply in early 2020
even before concerns about the virus crisis escalated, adding
urgency to the need for a trade deal with the European Union, an
industry survey showed.             
    * Physical gold markets in major Asian hubs last week reeled
from the impact of the outbreak and dealers offered deeper
discounts in top consumer China.         
    * SPDR Gold Trust      , the world's largest gold-backed
exchange-traded fund, said its holdings fell 1.33% to 931.59
tonnes on Friday.          
    * Speculators reduced their bullish positions on COMEX gold
and silver contracts in the week to March 10, the U.S. Commodity
Futures Trading Commission (CFTC) said on Friday.        
    * Palladium        fell 3.1% to $1,750.50 per ounce, while
platinum        slipped 0.8% to $755.50. 
    * Silver        gained 0.7% to $14.78 per ounce.
    
DATA/EVENTS (GMT) 
0200 China Urban Investment (YTD) YY (Feb)
0200 China Industrial Output YY (Feb)
0200 China Retail Sales YY (Feb)
1100 EU    Reserve Assets Total (Feb)

 (Reporting by K. Sathya Narayanan in Bengaluru)
  
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