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PRECIOUS-Gold rises 1.4% on flight to safety driven by pandemic fears

 (Updates prices)
    * China's factory activity improves in March
    * SPDR Gold Trust Holdings up 0.3% 
    * Global death toll from coronavirus over 38,000
            

    By Asha Sistla
    April 1 (Reuters) - Gold rose more than 1% on Wednesday as
fears over a worsening coronavirus pandemic triggered a flight
to safety, with expectations of further monetary easing by
central banks adding support.
    Spot gold        was up 1.4% at $1,592.83 per ounce by 0730
GMT, having slumped 3.1% in the previous session on a strong
dollar. U.S. gold futures         gained 0.5% at $1,604.50.
    "Investors may be shifting to gold for safety," said CMC
Markets analyst Margaret Yang Yan, who saw the rebound spurred
by President Donald Trump's remarks that the next two weeks of
the pandemic could be painful for the United States.
            
    "The ramification of easing monetary policy cycle and
trillion dollars of stimulus means the market will be full of
liquidity and ample supply of paper money in months, quarters or
years to come, and that's definitely supporting gold's rally
amid very limited supply (of physical bullion)."
    Gold is considered an attractive investment during times of
political or economic uncertainty. It is highly sensitive to
interest rates, as lower rates reduce the opportunity cost of
holding the non-yielding bullion.
    The Federal Reserve on Tuesday broadened the ability of
dozens of foreign central banks to access U.S. dollars during
the crisis by allowing them to exchange their holdings of U.S.
Treasury securities for overnight dollar loans.             
    Limiting physical gold's supply, three of the world's
largest gold refineries said they had suspended production in
Switzerland for at least a week after local authorities ordered
the closure of non-essential industry.             
    Russia has also stopped gold purchases.             
    In equities, Asian stocks clung to gains, supported by
positive China PMI data, but risks remain large as the pandemic
rattles the underpinnings of the global economy.            
            
    "The tentative signs of improvement in data from China has
given some renewed confidence to the region ... expect that to
support both equity and gold prices in Asia this morning," said
Jeffrey Halley, a senior market analyst at OANDA.
    Holdings in SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, rose 0.3% to 967 tonnes on
Tuesday.          
    Palladium        slid 1.6% to $2,314.80 per ounce, platinum
       fell 0.6% to $717.66 and silver        edged 0.1% higher
at $13.99.

 (Reporting by Asha Sistla and K. Sathya Narayanan in Bengaluru;
editing by Uttaresh.V, Subhranshu Sahu and Vinay Dwivedi)
  
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