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PRECIOUS-Gold firms on weaker dollar as focus turns to Fed

Published 17/08/2020, 01:56 pm
© Reuters.
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* Specs cut bullish gold positions in week to Aug. 11 - CFTC

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser

(Adds comment, updates prices)

By Harshith Aranya

Aug 17 (Reuters) - Gold rose on Monday as the dollar eased, recouping initial declines following a steep drop in the previous week, with focus on the release of U.S. Federal Reserve minutes later this week.

Spot gold XAU= rose 0.3% to $1,949.09 per ounce by 0636 GMT.

Gold fell 4.5% last week in its biggest decline since March as investors reassessed positions after bullion retreated from a record peak of $2,072.50 scaled on Aug. 7. U.S. gold futures GCcv1 gained 0.5% at $1,958.90 per ounce.

Gold does not "seem ready to resume the selloff in earnest as traders wait for FOMC meeting minutes and the fate of U.S. fiscal stimulus negotiations," said DailyFx currency strategist Ilya Spivak.

"Prices may need to reclaim a foothold above the $2,000/oz figure to suggest near-term selling pressure has been neutralized."

Making gold more attractive for holders of other currencies, the dollar slipped as investors were relieved by a delay in the review of a U.S.-China trade pact. .DXY USD/

While a rise in real U.S. bond yields and profit taking "stifled gold's upward trajectory" somewhat, fundamentals look sound, said National Australia Bank economist John Sharma. US/

The minutes from the Fed's last policy meeting are due on Wednesday, with focus on any hints of a possible change to its guidance at its next review in September. document might suggest the Fed is not in a hurry to expand the monetary support toolkit for now," DailyFx's Spivak added.

"The sense of urgency could be reduced further if Democrats and Republicans manage to agree on another round of fiscal support." has risen 28.4% so far this year as unprecedented global stimulus to ease the economic blow from the COVID-19 pandemic pushed investors to bullion as a hedge against inflation and currency debasement. XAG= rose 1.5% to $26.81 per ounce, platinum XPT= rose 2.1% to $955.54 per ounce and palladium XPD= gained 2.6% to $2,164.07 per ounce.

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