PRECIOUS-Gold sheds 2%, palladium 12% as oil rout prompts dash for cash

(Updates prices)
* WTI fell below $0 on Monday for the first time ever
* Platinum slides to 1-week low; silver drops to 2-week low
* Interactive graphic tracking the global coronavirus
spread: open
https://tmsnrt.rs/3aIRuz7 in an external browser

By Arpan Varghese
April 21 (Reuters) - Gold prices fell about 2% to a near
two-week low on Tuesday, while palladium tumbled 12% as a rout
in oil markets prompted panic selling across assets and forced
investors to sell precious metals to cover their losses.
Spot gold XAU= was down 1.7% at $1,665.10 per ounce by
1249 GMT. U.S. gold futures GCcv1 dropped 1.9% to $1,678.20.
Palladium XPD= slumped 11.6% to $1,914.14 an ounce, while
platinum XPT= fell 6.7% to $718.89 and silver XAG= fell 4.8%
to $14.63.
"The collapse in oil prices has continued today, creating
another dash for cash, and no market is being left unscathed,"
Saxo Bank analyst Ole Hansen said, adding the $1,635 level could
be the next target for gold.
Worries about credit defaults are rising and "into that
environment, gold is not able to withstand the pressure coming
from the need to de-leverage", he added.
U.S. oil futures traded in negative territory, after sinking
below zero for the first time ever on Monday, as concern grew
the sector will run out of storage for a glut caused by global
coronavirus lockdowns. O/R
The nose-dive in U.S. crude prices and dismal corporate
earnings reports prompted concerns about the lasting damage to
the global economy from the pandemic, sending global stocks
lower. .EU
Gold is considered a safe store of value during political
and financial uncertainty, but bullion has on occasion moved in
tandem with equities recently, especially as sharp selloffs in
wider markets force investors to sell precious metals to meet
margins calls and cover their losses.
But the current slide might not be as steep as a free-fall
in mid-March, when gold slid as much as 4.6% while palladium
plummeted about 28% since "we don't have the same amount of
elevated positions in the futures market", Saxo Bank's Hansen
said.
However, a wave of stimulus measures by central banks to
ease the economic damage from the new coronavirus pandemic and
inflows into exchange traded funds (ETF) are likely to keep gold
supported, analysts said.
Holdings in the SPDR Gold Trust GLD , the world's largest
gold-backed ETF, are now at their highest in over three years.
GOL/ETF
Countering this, however, was waning physical demand from
top consumers India and China. GOL/AS PREC/POLL
"Gold looks a bit vulnerable once these ETF inflows ease
somewhat," Commerzbank analyst Carsten Fritsch said.
Adding further pressure on bullion, the dollar .DXY ,
another safe-haven, surged. USD/
"Only in case of longer lasting depression, could we see
more upside in gold prices from current levels," Julius Baer
analyst Carsten Menke said.