Gold steady as equities retreat on fears of virus impact on growth

• Spot gold was little changed at $1,566.33 per ounce, as of 0819 GMT, down about 1.5pc for the week.
• Lower US interest rates put pressure on the dollar and bond yields, increasing the appeal of gold.
• Silver fell 0.3pc to $17.76 per ounce, set for its worst week in two months, while platinum shed 0.2pc to $959.79.

The metal, however, was still on track for its biggest weekly decline in three months as solid US economic data, including a drop in unemployment benefits, continued to underpin the greenback. Investors now await the non-farm payrolls data due later in the day.

Spot gold was little changed at $1,566.33 per ounce, as of 0819 GMT, down about 1.5pc for the week. US gold futures were unchanged at $1,569.30 per ounce.

"The focus is on whether we are going to get a strong enough economic shock (from the virus) that would get central banks to cut rates further," said Ilya Spivak, a senior currency strategist at DailyFx.

"There is an underlying anxiety and ... clearly markets are very sensitive, which is why gold doesn't want to fall because there is anticipation that no central bank is going to be raising rates in this environment for a long time."

Lower US interest rates put pressure on the dollar and bond yields, increasing the appeal of gold.

Asian shares slipped on the rising number of fatalities. The death toll in China reached 636 by the end of Thursday, up 73 from the previous day, the National Health Commission said.

Data on Thursday showed US unemployment benefits dropped to a nine-month low and worker productivity rebounded, boosting the dollar to near 4-month highs. The dollar index was on track for its best weekly gain since early November.

"The US market is going good and we are getting some positive numbers from the economic releases and because of that we have seen lacklustre trade in gold," said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.

Among other metals, palladium fell 0.4pc to $2,336.78 an ounce. The metal, mainly used in car exhaust systems to cut back emissions, was still on track to post its first weekly gain in three.

The new Chinese auto-emissions standards will likely support the palladium market this year, despite its recent price wobble following the Wuhan virus outbreak, Capital Economics said in a note dated Feb. 6.

Silver fell 0.3pc to $17.76 per ounce, set for its worst week in two months, while platinum shed 0.2pc to $959.79.