PRECIOUS-Gold gains on hopes of rate cuts by global central banks

(Adds graphic, updates prices)
* Markets price in a 50 bp rate cut by Fed
* Focus on G7 conference call on virus response
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl

By K. Sathya Narayanan
March 3 (Reuters) - Gold prices rose on Tuesday as
expectations grew for interest rate cuts by major central banks
to limit the economic fallout from the fast-spreading
coronavirus.
Spot gold XAU= climbed by 0.4% to $1,596.61 per ounce as
of 0725 GMT, after a 0.4% gain on Monday. U.S. gold futures
GCv1 advanced 0.1% to $1,597.10.
Both U.S. Federal Reserve Chairman Jerome Powell and
European Central Bank (ECB) President Christine Lagarde have
hinted at action in recent days to cushion the virus impact.
"Due to the coronavirus central banks are in a hurry to make
fresh cuts and that is making ground for gold," said Vandana
Bharti, assistant vice-president of commodity research at SMC
Comtrade.
"We were expecting a Fed rate cut in the second half of 2020
but we may see one in the first half."
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion.
Traders on Monday piled into bets that the Fed will deliver
a big dose of stimulus starting this month amid growing concerns
over the economic impact of the epidemic. April Fed funds rate futures FFJ0 imply a 0.50 percentage
point cut by the U.S. central bank.
Expectations for aggressive monetary policy easing also
supported global equities, while the dollar .DXY held close to
a 1-1/2-month low hit in the previous session. MKTS/GLOB USD/
Gold is moving along with equities as investors re-establish
positions after liquidating them last week to meet margin calls
in other assets, said Jeffrey Halley, a senior market analyst at
OANDA, adding that lower U.S. Treasury yields also supported the
metal.
Benchmark U.S. 10-year Treasury yields US10YT=RR hovered
close to record lows touched in the previous session. US/
Meanwhile, data released on Monday showed U.S. factory
manufacturing activity slowed last month as new orders
contracted, reflecting worries about supply chain disruptions
due to the virus and underscoring the need for a rate cut.
Investors are waiting for the G7 conference call later in
the day, where finance ministers and central bank governors will
discuss measures to deal with the epidemic and its economic
impact. On the technical front, spot gold may bounce towards $1,631
per ounce, Reuters technical analyst Wang Tao said, adding that
support was at $1,584 per ounce and a break below that could
cause a fall to $1,565. Tech/C
Among other precious metals, palladium XPD= slipped 0.5%
to $2,510.67 per ounce, while platinum XPT= rose 0.9% to
$867.87. Silver XAG= was up 0.4% at $16.79 per ounce.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Gold gains with equities https://tmsnrt.rs/2vBAsmy
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>