PRECIOUS-Gold jumps over 3% after U.S. Fed's emergency rate cut

(Updates prices)
* Gold poised for best day since June 2016
* U.S. Fed delivers its first emergency rate cut since 2008
* G7 officials offer "appropriate", but unspecific policy
moves
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl

By Swati Verma
March 3 (Reuters) - Gold surged over 3% on Tuesday after the
U.S. central bank cut interest rates to help cushion the economy
from damage caused by the coronavirus outbreak and on
expectations of policy easing by other major central banks.
Spot gold XAU= climbed 2.9% to $1,636.25 an ounce by 02:19
p.m. EST (1919 GMT), set for its biggest one-day percentage rise
since June 2016. U.S. gold futures GCv1 settled 3.1% higher at
$1,644.40.
Prices earlier soared as much as 3.3% after the U.S. Federal
Reserve cut interest rates in an emergency move to safeguard the
world's largest economy from the impact of the coronavirus.
"Clearly the Fed delivered a very strong signal that they
are ready to support the U.S. economy against the growing threat
of the virus and this is quite a green light for other central
banks to do the same," said Daniel Ghali, commodity strategist
at TD Securities.
The Fed said it is cutting rates by a half percentage point
to a target range of 1.00% to 1.25%. In a news conference
following the decision, Fed Chair Jerome Powell said the
coronavirus would weigh on the U.S. economy for some time.
"An intermeeting cut, the first since 2008, also sends a
message that the Fed is all-hands on deck," said Tai Wong, head
of base and precious metals derivatives trading at BMO.
"This should be positive for equities and positive for gold,
at least short term, with rates lower and potentially other
central bank action on the way."
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion and also weigh on U.S. yields and the
dollar, in which gold is priced.
The dollar index .DXY fell to its lowest in nearly 2
months against a basket of currencies. USD/
Gold prices slumped as much as 4.7% on Friday amid a broader
market sell-off but have recovered since.
"Gold is back above the $1,600 an ounce level and could be
poised for another run towards the $1,700 level once governments
announce the details to the major fiscal stimulus response,"
said Edward Moya, a senior market analyst at broker OANDA, in a
note.
The Fed decision came after Group of Seven finance officials
earlier on Tuesday said, without being specific, they would use
all appropriate policy tools to support the economy against
downside risks posed by the fast-spreading coronavirus.
Among other precious metals, palladium XPD= fell 1% to
$2,498.50 per ounce, silver XAG= jumped 2.4% to $17.13 and
platinum XPT= rose 0.4% to $863.50.

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World finance officials plot 'powerful and timely' response to
beat coronavirus ID:nL4N2AW2GJ
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