January 22, 2020 / 5:06 AM / a month ago

PRECIOUS-Gold slips as dollar gains and China steps up virus countermeasures

(Recasts, updates prices)

* China coronavirus death toll climbs to 9, total infections 440

* Physical gold demand into Chinese New Year weak -strategist

By Asha Sistla

Jan 22 (Reuters) - Gold prices slipped on Wednesday as the dollar firmed and Chinese health officials said they had stepped up protective measures in hospitals to counter the new coronavirus that has raised fears of a global pandemic.

Spot gold fell 0.2% to $1,554.54 an ounce by 0758 GMT, extending losses that took prices to their lowest since Jan. 15 in the previous session at $1,545.96.

U.S. gold futures were down 0.3% at $1,553.80.

Asian stock markets bounced on China’s comments on the virus, though worries remain over the potential negative impact on domestic demand and tourism.

The death toll from the new flu-like coronavirus in China rose to nine on Wednesday with 440 confirmed cases, Chinese health officials said as authorities stepped up efforts to control the outbreak by discouraging public gatherings in Hubei province ahead of Lunar New Year celebrations.

The week-long holiday is a peak period for travel and gold demand in China.

“The dollar is steady and there is apprehension that there will be less gold demand from China in the current year,” said Hareesh V, head of commodity research at Geojit Financial Services.

China’s gold consumption fell for the first time in three years in 2019, data showed on Tuesday, as high prices and an economic slowdown hit buying in the world’s biggest market for the metal.

The dollar firmed against a basket of currencies, making gold more expensive for holders of other currencies.

“Gold is struggling to gain momentum as positive equity market sentiment builds,” Stephen Innes, chief market strategist at AxiCorp, said in a note.

“Hedge funds remain on the sidelines and sovereign accounts that were active at the start of the year seem to be absent ... physical demand into the Chinese Lunar New Year is weak.”

On the technical front, spot gold could revisit its Jan. 14 low of $1,535.63, said Reuters technical analyst Wang Tao.

Among other precious metals, palladium jumped 1.7% to $2,442.61 an ounce, silver edged up by 0.1% to $17.78 and platinum gained 0.3% to $1,001.68. (Reporting by Asha Sistla in Bengaluru Editing by David Goodman )

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