PRECIOUS-Gold rises 1% as central bank stimulus fuels investor interest

(Updates prices)
* Investors await U.S. jobless claims data
* Japanese business confidence plunges to decade lows in
April
* India's gold demand could hit 3-decade low in 2020
* Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7
in an external browser

By Brijesh Patel
April 16 (Reuters) - Gold prices rose more than 1% on
Thursday as a raft of stimulus measures from central banks to
counteract the coronavirus crisis drove investors into bullion
as a safe store of value, while sombre U.S. economic reports
stoked fears of a global recession.
Spot gold XAU= was up 1.2% at $1,735.55 per ounce by 1207
GMT, holding near a more than seven-year high hit earlier this
week. U.S. gold futures GCv1 rose 1.3% to $1,763.
"The main factor supporting gold at the moment is the
extraordinary amount of stimulus from central banks. I don't
think it's been fully priced in yet," OANDA analyst Craig Erlam
said.
"The record highs hit in the aftermath of the global
financial crisis, and even higher, look perfectly reasonable,
under the circumstances. The $1,800 level does not seem very far
away."
U.S. retail sales plunged 8.7% last month, the biggest
decline since the government started tracking the series in
1992, while manufacturing output fell by the most in 74 years.
Japanese business confidence plunged to decade lows in
April, while British retail spending slumped by more than a
quarter during the first two weeks of lockdown measures.
Gold, which is often used as a safe store of value during
times of political and financial uncertainty, is highly
sensitive to interest rates, as lower rates reduce the
opportunity cost of holding non-yielding bullion.
Central banks have rolled out a wave of fiscal and monetary
measures to ease the economic damage from the virus, which has
infected more than 2 million people globally and killed 136,667.
Focus now shifts to U.S. jobless claims data on Thursday
which is expected to show a jump to 20 million over the past
month. While gold usually gains from reduced risk appetite, bullion
has, on occasion, moved in tandem with equities recently, with
sharp sell offs in wider markets prompting investors to sell
precious metals to cover losses elsewhere.
"While gold will continue to be in demand, sometimes
investors need funds to cover their margin calls, so losses in
other financial assets might lead to falls in the gold price,"
said John Sharma, economist at National Australia Bank.
MKTS/GLOB
Gold's latest rise came despite gains in the dollar .DXY ,
also considered a safe haven. USD/
On the physical side, gold consumption in India, the second
largest buyer of the precious metal, could hit a three-decade
low in 2020 as a nationwide lockdown has closed jewellery stores
during key festivals and the wedding season. Elsewhere, palladium XPD= climbed 0.9% to $2,199.54 an
ounce, and platinum XPT= gained 1.2% to $788.92. Silver XAG=
rose 0.5 to $15.54 per ounce.