PRECIOUS-Gold dips on profit-taking, rate expectations cap losses

(Updates prices)
* ECB holds rates
* Jitters over China virus push equities lower
* Spot gold biased to revisit low of $1,545.96/oz
-technicals

By Diptendu Lahiri
Jan 23 (Reuters) - Gold eased on Thursday as investors
booked profits from recent rallies but held above the $1,550
technical support level on continuing low interest rates and a
drop in risk appetite.
Spot gold XAU= was down 0.2% to $1,556.05 per ounce by
1340 GMT. U.S. gold futures GCcv1 were little changed
at$1,555.70 per ounce.
"From the beginning of the year, gold has rallied and that
had led investors to take positions and now in the absence of
any major news (on fundamentals), they are booking some profit,"
said Frederic Panizzutti, managing director at MKS Dubai.
Gold broke above the psychological barrier of $1,500 an
ounce in late December on uncertainty surrounding the U.S.-China
trade deal and the global economy.
Bullion climbed further to a near-seven-year peak of
$1,610.90 on Jan. 8 after an escalation in U.S.-Iran tensions
and has held above $1,550 for the most part ever since.
"In the long term, the market is still bullish," Panizzutti
added, pointing to geopolitical uncertainties and low interest
rates that reduce the opportunity cost of holding non-yielding
bullion.
The European Central Bank kept interest rates unchanged at
its latest policy meeting on Thursday and launched a "strategic
review" of its inflation goal and tools. The U.S. Federal Reserve's first meeting of the year is
scheduled for Jan. 28-29.
Limiting gold's losses, global stock markets were in the
red, led by the biggest decline in Chinese stocks in more than
eight months as concern mounted over the spread of a virus
outbreak in China. Traders remained anxious about the spread of the coronavirus
as China gears up to celebrate the Lunar New Year from this
weekend, a peak period for travel and gold demand in the region.
Gold is considered a safe asset in times of political and
economic uncertainty.
However, OANDA analyst Jeffrey Halley said the virus fears
appear to have been overlooked by the gold market.
"If regional investors were seriously concerned about
coronavirus, we would have expected gold to be higher and not
lower today," he said in a note.
Spot gold is biased to revisit its Jan. 21 low of $1,545.96,
looking shaky around a resistance at $1,564, said Reuters
technical analyst Wang Tao. TECH/C
Among other precious metals, palladium XPD= fell 1.2% to
$2,443.29, silver XAG= dipped 0.5% to $17.73 and platinum
XPT= was also down 0.8% at $1,003.95.