(Recasts, updates prices and adds comments) * Dollar holds near four-week high * Global stocks tumble * GRAPHIC-2020 asset returns: tmsnrt.rs/2jvdmXl By K. Sathya Narayanan March 18 (Reuters) - Gold erased early gains to fall more than 1% on Wednesday as mounting fears over the economic hit from the coronavirus overshadowed additional stimulus measures by the United States and prompted investors to sell precious metals to hoard cash. Spot gold fell 1.1% to $1,511.72 per ounce by 0701 GMT. U.S. gold futures were down 0.9% to $1,512.10 an ounce. "The fact that equity markets are still falling is signalling deteriorating global sentiment, which means more investors are going for cash," said Michael McCarthy, chief strategist at CMC Markets. "Globally, we are lengthening our expectations of how long the economic interruptions from the virus will last and that's another reason driving people to cash." U.S. stock futures and several Asian shares fell in choppy trade as worries about the virus eclipsed hopes broad policy support would combat the economic fallout of the outbreak. The U.S. dollar eased, but hovered near a four-week high scaled on Tuesday against key rivals, making gold costlier for investors holding other currencies. The U.S. Federal Reserve said on Tuesday it would reinstate a funding facility used during the 2008 financial crisis to get credit directly to businesses and households as fears over a liquidity crunch due to the virus have grown in recent days. Meanwhile, the Trump administration pursued a $1 trillion stimulus package that could deliver $1,000 checks to Americans within two weeks to cushion the economy. The U.S. measure helped gold prices rise 1% in early Asian trade before the metal changed its course. "That had boosted sentiment a little and we saw the unwinding of some of that behaviour, which is 'sell gold among everything else to find cash,'" IG Markets analyst Kyle Rodda said. Among countries and central banks providing stimulus to their virus-hit economies, Britain launched a new lending scheme to provide short-term bridging finance for large businesses hurt by the epidemic, which will be run and funded by the Bank of England. Underscoring the economic strain from the virus, a survey showed that the mood among German investors slumped in March to levels last seen at the beginning of the world financial crisis in 2008 due to alarm at the impact on Europe's largest economy. Among other precious metals, palladium fell 0.7% to $1,631.42 per ounce, while platinum eased 0.1% to $660.75. Silver was 1.2% lower at $12.44. (Reporting by K. Sathya Narayanan in Bengaluru; Editing by Anil D'Silva and Subhranshu Sahu)
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