PRECIOUS-Gold rebounds on bargain hunting, bets for loose central bank policy

(Updates prices)
* WHO plays down reports of new drugs to treat coronavirus
* Nasdaq hits a record high at the open
* Dollar jumps to highest since Dec. 2

By K. Sathya Narayanan
Feb 5 (Reuters) - Gold rose on Wednesday on bargain hunting,
reversing course from a two-week low touched earlier, as
investors latched on to the metal's overall uptrend on the back
of a low interest rate environment globally and lingering
uncertainties.
Spot gold XAU= rose 0.4% to $1,558.12 per ounce by 1842
GMT. U.S. gold futures GCv1 settled 0.5% up at $1,562.80.
"Overall the trend is up, people want to be in gold right
now just because of the central banks and what they're doing in
the long term. So, people are looking at the dip as an
opportunity to accumulate more gold," said Bob Haberkorn, senior
market strategist at RJO Futures.
"People are coming into the market because of the lower
interest rates and the loose policy of global central banks."
Gold's gains came despite a surge in U.S. stock markets,
helped by strong monthly domestic private jobs data and reports
of progress in developing a treatment to fight the
fast-spreading coronavirus, as well as a stronger dollar.
MKTS/GLOB
The World Health Organization played down media reports of
"breakthrough" drugs being discovered to treat people infected
with the new virus, which has claimed about 500 lives in China
and has spread to at least 20 other countries. "When something like a virus comes out, or a big world fear,
people shoot first and ask questions later and when they shoot
first, they grab gold. This is the buy the pullback mode," said
Michael Matousek, head trader at U.S. Global Investors.
Bullion had slipped to its lowest since Jan. 21 after a
Chinese TV report said a research team at Zhejiang University
had found an effective drug for the virus. Investors now await the U.S. non-farm payrolls report on
Friday to gauge the strength of the labor sector as the Federal
Reserve kept interest rates unchanged in the last meeting,
citing continued moderate economic growth and a "strong" job
market. Lower interest rates reduce the opportunity cost of holding
non-yielding bullion.
On the technical side, a break below the $1,545 level could
change the pull back into a consolidation while a rise above the
$1,560 level could give way to further upside, U.S. Global
Investors' Matousek said.
Among other precious metals, palladium XPD= was down 0.2%
at $2,428.75 an ounce, having touched a near two-week peak
earlier in the session.
Silver XAG= rose 0.3% to $17.62, while platinum XPT=
gained 1.9% to $981.64.