PRECIOUS-Gold rises as China virus fears stoke demand for safe havens

(Updates prices)
* U.S. 10-year Treasury yields fall to lowest in three
months
* WHO to decide whether virus constitutes global emergency
* Norilsk Nickel to deliver 3 tonnes of palladium to market

By Brijesh Patel
Jan 30 (Reuters) - Gold prices rose on Thursday as concerns
of a slowdown in global growth due to a virus outbreak in China
weakened risk appetite among investors.
Spot gold XAU= was up 0.5% at $1,583.93 per ounce by 2:02
p.m. EST (1902 GMT). U.S. gold futures GCv1 settled 0.8%
higher at $1,583.50.
"We have a bit of risk off in the market due to fears of
global health from the coronavirus," said Frank Cholly, senior
market strategist at Chicago brokerage RJO Futures.
The first U.S. incident of person-to-person spread of the
new coronavirus was identified in Illinois, the U.S. Centers for
Disease Control and Prevention said on Thursday. The flu-like virus, which originated in China and has spread
to over 15 countries, has disrupted global travel and prompted
several companies to suspend operations in China. Fears of a hit to growth in the world's second-largest
economy triggered a sharp sell-off in financial markets, pushing
investors toward safe havens like gold, the Japanese yen and the
Swiss franc. MKTS/GLOB USD/
"The coronavirus economic impact is growing and a flight to
Treasuries and gold will likely remain the favorite trades on
Wall Street," Edward Moya, a senior market analyst at broker
OANDA, said in a note.
Federal Reserve Chair Jerome Powell also noted the risks of
a short-term slowdown in China, including to the U.S. economy,
after the central bank's widely expected decision on Wednesday
to keep interest rates unchanged. "The Fed is not lowering rates, they're in a holding
pattern, but we are going to be in a low-rate environment for
some time and that favors the gold market," Cholly said.
Lower U.S. interest rates put pressure on the dollar and
bond yields, increasing the appeal of gold and other
non-yielding assets.
U.S. Treasury yields dipped to three-month lows on Thursday
and a closely watched part of the yield curve briefly inverted.
US/
The World Health Organization's Emergency Committee is due
to reconvene on Thursday to decide whether to declare the virus
a global emergency. Elsewhere, palladium XPD= was mostly unchanged at
$2,289.70 per ounce, having hit a record high of $2,582.19 on
Jan. 20 on supply concerns.
Russian mining company Norilsk Nickel said on Wednesday its
Global Palladium Fund would deliver three tonnes of palladium
ingots to the market from its current stock to provide
short-term relief to tight supplies. Silver XAG= gained 2.3% to $17.94, while platinum XPT=
edged 0.1% higher to $974.71.