PRECIOUS-Gold rebounds as recent plunge opens door for bargain hunters

(Updates prices)
* Gold likely to remain volatile in near term -Goldman
* Dollar jumps to three-week high
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl

By Brijesh Patel and Swati Verma
March 17 (Reuters) - Gold jumped on Tuesday as a
five-session decline in the bullion market led bargain hunters
out in force, with Federal Reserve's announcement to boost
lending soothing market fears over a crunch in liquidity.
Precious metals were caught up in a broader market sell-off
as coronavirus continued to spread rapidly, with some investors
selling the metals for cash and to cover margin calls across
other markets.
Spot gold XAU= was up 0.7% to $1,524.81 per ounce at 01:37
p.m. EDT (1737 GMT). U.S. gold futures GCcv1 settled up 2.6%
to $1,525.80.
"The fact that the Fed is stepping in, they are putting out
more liquidity in the market, has helped gold to trade higher.
Gold is starting to act like how it should act," said Bob
Haberkorn, senior market strategist at RJO Futures.
Safe-haven gold erased earlier losses and jumped over 2%
after the Fed said it would relaunch financial crisis-era
purchases of short-term corporate debt to thaw credit markets
strained by the coronavirus pandemic. MKTS/GLOB
"Gold has got a lot of fundamental factors behind it to help
drive it higher. Plus, you do have the technical aspect of it
given the drawdown we had over the past two days," said Michael
Matousek, head trader at U.S. Global Investors.
"It is a great opportunity for people to enter into the gold
market."
Gold has shed nearly 10% from over seven-year highs hit last
week. Bullion slumped as much as 5.1% to its lowest since
November 2019 and broke below its 200-day moving average on
Monday.
"Gold was also hurt by the fall in oil prices, as it brought
Russia's Central Bank purchases to a halt and could possibly
trigger some selling," Goldman Sachs analysts said in a note.
"In the near term, the gold price is likely to remain
volatile as it tries to find a new equilibrium."
Limiting gold's advance, the dollar .DXY jumped more than
1.6% to a three-week high. USD/
Palladium XPD= eased 0.8% to $1,604.13, having plummeted
as much as 18% in the previous session. Platinum XPT= slipped
0.8% to $657.66 per ounce, having posted its biggest one-day
percentage decline ever on Monday.
"Platinum, palladium and silver to some extent are
industrial metals. The fact the market is looking at a
diminished demand outlook due to the virus, it's natural that
anything that has an industrial aspect to it is going to go
down," RJO Futures' Haberkorn said
Silver XAG= fell 3% to $12.51, after touching its lowest
since 2009 in the last session.

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