(Updates prices, adds graphics)
* Fed slashes rates for second time this year
* Platinum prices down 26% at day’s low
* Silver dips as much as 20%, palladium falls 18%
By Sumita Layek
March 16 (Reuters) - Precious metal prices collapsed on Monday, with platinum plunging to a 17-1/2 year low as investors opted for cash after a U.S. rate cut failed to stem a coronavirus-led sell-off.
Platinum fell as much as 26%, heading for its biggest one-day loss on record, while palladium dropped by nearly 18%, silver almost 20%, and gold more than 5% to break below the key psychological level f $1,500 an ounce.
By 1350 GMT, spot gold was down 4.5% at $1,460.70 per ounce, while U.S. gold futures were 4% lower at $1,455.40 per ounce.
Platinum was down 14.6% to $650 per ounce, having earlier dipped to its lowest since October 2002 at $558.
Silver was 15% lower at $12.47 after hitting its lowest since January 2009, while palladium was down 15.7% to $1,522.50.
Precious metals were caught up in a broader market sell-off as coronavirus continued to spread rapidly, with some investors obliged to sell assets to cover margin calls.
“Overall, investors are mainly looking for cash. They’re liquidating any assets they have, even gold,” said Hussein Sayed, chief market strategist at FXTM.
“At this stage, we’re almost sure recession will hit the global economy,” he said. “The longer this virus stays, the more countries announce emergency measures, the more the lockdown period continues, the more sentiment will worsen.”
Stocks found little support from the U.S. Federal Reserve slashing interest rates to near zero and restarting bond buying to cushion the economy from the virus-led impact.
The coronavirus outbreak has claimed more than 6,500 lives worldwide and triggered panic across markets, prompting central banks around the globe to push through support measures to temper the economic fallout.
European Union finance ministers plan to agree on Monday on a coordinated economic response to the pandemic.
“It’s a continued hunt for cash for liquidity. Everything is being sold, market participants are throwing in the towel just leaving the exits, and when everybody wants to exit there is a massive sell off in particular in very illiquid markets like PGMs,” Commerzbank analyst Carsten Fritsch said.
The more industrial precious metals also tend to suffer from the threat of a downturn in economic activity, with autocatalyst metals platinum and palladium particularly sensitive to expectations for falling car sales.
Reporting by Sumita Layek in Bengaluru; Editing by Jan Harvey and Alexander Smith