PRECIOUS-Gold rises as China virus fears stoke demand for safe havens

(Updates prices)

* U.S. 10-year Treasury yields fall to lowest in three months

* WHO to decide whether virus constitutes global emergency

* Norilsk Nickel to deliver 3 tonnes of palladium to market

Jan 30 (Reuters) - Gold prices rose on Thursday as concerns of a slowdown in global growth due to a virus outbreak in China weakened risk appetite among investors.

Spot gold was up 0.5% at $1,583.93 per ounce by 2:02 p.m. EST (1902 GMT). U.S. gold futures settled 0.8% higher at $1,583.50.

“We have a bit of risk off in the market due to fears of global health from the coronavirus,” said Frank Cholly, senior market strategist at Chicago brokerage RJO Futures.

The first U.S. incident of person-to-person spread of the new coronavirus was identified in Illinois, the U.S. Centers for Disease Control and Prevention said on Thursday.

The flu-like virus, which originated in China and has spread to over 15 countries, has disrupted global travel and prompted several companies to suspend operations in China.

Fears of a hit to growth in the world’s second-largest economy triggered a sharp sell-off in financial markets, pushing investors toward safe havens like gold, the Japanese yen and the Swiss franc.

“The coronavirus economic impact is growing and a flight to Treasuries and gold will likely remain the favorite trades on Wall Street,” Edward Moya, a senior market analyst at broker OANDA, said in a note.

Federal Reserve Chair Jerome Powell also noted the risks of a short-term slowdown in China, including to the U.S. economy, after the central bank’s widely expected decision on Wednesday to keep interest rates unchanged.

“The Fed is not lowering rates, they’re in a holding pattern, but we are going to be in a low-rate environment for some time and that favors the gold market,” Cholly said.

Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of gold and other non-yielding assets.

U.S. Treasury yields dipped to three-month lows on Thursday and a closely watched part of the yield curve briefly inverted.

The World Health Organization’s Emergency Committee is due to reconvene on Thursday to decide whether to declare the virus a global emergency.

Elsewhere, palladium was mostly unchanged at $2,289.70 per ounce, having hit a record high of $2,582.19 on Jan. 20 on supply concerns.

Russian mining company Norilsk Nickel said on Wednesday its Global Palladium Fund would deliver three tonnes of palladium ingots to the market from its current stock to provide short-term relief to tight supplies.

Silver gained 2.3% to $17.94, while platinum edged 0.1% higher to $974.71. (Reporting by Brijesh Patel in Bengaluru; editing by Jonathan Oatis and Heather Timmons)