PRECIOUS-Gold gains as virus fears outweigh strong U.S. jobs data

(Updates prices)
* U.S. non-farm payrolls rose by 225,000 jobs last month
-data
* Gold eyes biggest weekly drop in three months
* Silver set for biggest weekly fall since early December
* Precious metals this week https://fingfx.thomsonreuters.com/gfx/editorcharts/GLOBAL-PRECIOUS/0H001R89NBSS/index.html

By Diptendu Lahiri
Feb 7 (Reuters) - Gold prices rose on Friday as fears of an
economic slowdown from the coronavirus outbreak and lower
interest rates globally offset strong U.S. economic data.
Spot gold XAU= rose 0.3% to $1,570.52 per ounce by 1842
GMT, but was down about 1.2% this week. It was on track for the
biggest weekly loss since early November.
U.S. gold futures GCv1 settled 0.2% up at $1,573.40.
"The market seems to be growing more nervous about the
outbreak in China," said Tai Wong, head of base and precious
metals derivatives trading at BMO. "This sharp, fast,
counterintuitive reaction in gold is very telling. There's good
demand here in the face of a very strong economic signal."
U.S. nonfarm payrolls increased by 225,000 jobs last month,
data showed, higher than 160,000 jobs additions expected by a
Reuters poll. Fears of a global economic slowdown and uncertainty around
the coronavirus are keeping gold supported, Edward Moya, a
senior market analyst at broker OANDA.
The coronavirus outbreak in China, which has killed more
than 600 people and infected thousands, has dented investor
interest in riskier assets. MKTS/GLOB
"A big jump in reported cases or even harsher quarantine
measures that contravene the story of the official numbers could
push gold back to $1,600 level. However, some incontrovertible
good news out of China and/or a sharp bond sell-off could
trigger a reversal," BMO's Wong said.
Also supporting gold were low interest rates by major
central banks across the globe and their quantitative easing
policy.
The U.S. Federal Reserve kept benchmark interest rates
unchanged at its January policy meeting, citing moderate
economic growth and a strong jobs market. Gold is a safe haven that investors turn to in times of
economic and financial uncertainty, and lower interest rates
reduce the opportunity cost of holding the non-yielding metal.
Limiting gold's advance, however, the dollar .DXY rose to
its strongest against major rivals since mid-October.
"The environment for gold is still supportive and a clear
breakthrough of $1,575 could open space for another rally to the
key threshold of $1,600," ActivTrades chief analyst Carlo
Alberto De Casa said.
Elsewhere, palladium XPD= fell 1.2% to $2,319.23 an ounce
but was on track for its first weekly gain in three.
Silver XAG= slipped 0.6% to $17.71, set for its worst week
in two months, while platinum XPT= rose 0.5% to $966.36.