March 20, 2020 / 4:08 AM / 12 days ago

PRECIOUS-Gold rises 1% on safe-haven appeal but set for weekly drop

 (Adds comment and updates prices)
    * Dollar crosses 3-year high
    * Platinum set to post worst week ever
    * Silver set for 2nd weekly decline of about 15% since Sept
2011
    * Interactive graphic tracking global spread of coronavirus:
open
tmsnrt.rs/3aIRuz7 in an external browser. 

    By Asha Sistla
    March 20 (Reuters) - Gold prices rose 1% on Friday as
safe-haven buying offset a rush for cash amid fears over the
economic hit from the coronavirus, but bullion was headed for a
second weekly drop as investors sold the metal to meet margin
calls in other assets.
    Spot gold        gained 1% to $1,484.88 per ounce by 0552
GMT after a 1% fall in the previous session and was en route to
post a near 3% decline for the week. U.S. gold futures        
climbed 0.6% to $1,487.90.
    "It's definitely risk hedge buying. If only for a day ...
what can you buy to hedge weekend risk? You can be in cash or
precious metals, that's about it," said Jeffrey Halley, a senior
market analyst at OANDA.
    Asian shares sought a reprieve following gains on Wall
Street, while the dollar crossed a three-year high as the
epidemic drove a dash for cash.                   
    The U.S. Federal Reserve opened the taps for central banks
in nine new countries to access dollars in hopes of preventing
the outbreak from causing a global economic rout.             
    Several countries rolled out measures to stem the economic
damage, with the U.S. Senate unveiling a $1 trillion economic
stimulus plan, while the Bank of England promised 200 billion
pounds of bond purchases and cut its key interest rate to 0.1%.
                         
    While gold has been reacting to moves in financial markets
and at times found support from stimulus measures, "it's a bumpy
ride as liquidity and participation continue to fall by the
wayside," said Stephen Innes, chief market strategist at
AxiCorp, in a note.
    "I'm not so sure this is so much a function of the market,
or due to the fact that many gold traders are working at home."
    The global economy is already in a recession as the hit to
economic activity has become more widespread, a Reuters poll
showed.             
    The number of Americans filing for unemployment benefits
surged by the most since 2012 last week.             
    Among other precious metals, palladium        rose 0.5% to
$1,660.82 per ounce. Platinum        jumped 4.6% to $613.54 but
was set to post its biggest ever weekly fall.
    Platinum and palladium will remain turbulent in coming
months after huge losses sparked by the spread of the
coronavirus, before starting a tentative recovery with support
from palladium's supply gap and platinum's correlation with
gold, analysts said.             
    Silver        gained 3.5% to $12.54, but was on track to
post its second steepest weekly decline of about 15% since
September 2011.

 (Reporting by Asha Sistla in Bengaluru; Editing by Subhranshu
Sahu)
  
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