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PRECIOUS-Gold eases from 1-week high as safe-haven demand moves to dollar

Published 11/02/2020, 07:37 pm
© Reuters.  PRECIOUS-Gold eases from 1-week high as safe-haven demand moves to dollar
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(Adds comment and updates prices)

* U.S. Fed Chair to begin testimony before Congress

* Chinese policymakers likely to roll out more stimulus

* Spot gold may test a support at $1,563 - technicals

* Dollar holds above four-month high

By Asha Sistla

Feb 11 (Reuters) - Gold eased from a near one-week high hit in the previous session on Tuesday, as safe-haven demand broadly shifted to the dollar.

Spot gold XAU= fell 0.3% to $1,567.16 per ounce by 0801 GMT. The metal touched its highest since Feb. 4 at $1,576.76 on Monday. U.S. gold futures GCv1 fell 0.4% to $1,572.30.

The U.S. dollar held above a four-month high as doubts lingered about how quickly China's factories could get back to work after the country reported 108 new deaths. USD/ demand has gone to dollar instead of gold. In the last one week, the dollar has risen very sharply," said Jigar Trivedi, a commodities analyst at Anand Rathi Shares and Stock Brokers in Mumbai.

"Why dollar over gold - the Philadelphia Federal Reserve said that they are quite comfortable keeping the rates steady as of now, which is supported by positive U.S. economic data."

In the United States, two Federal Reserve policy markers played down the impact of the virus on the domestic economy, with focus now on Fed Chair Jerome Powell's testimony before Congress. is likely to sound fairly upbeat about the outlook for U.S. economic growth, even as he nods to the potential threat from the coronavirus in China. is highly sensitive to any reduction in interest rates, which decreases the opportunity cost of holding the non-yielding bullion.

"Do we see further easing as a result of the virus? If yes, then we'd see underpinned support for gold prices," said ING analyst Warren Patterson.

Further weighing on gold was a bounce back in Asian shares, which followed a record run in Wall Street. MKTS/GLOB

Spot gold may test a support at $1,563 per ounce, a break below which could cause a fall to $1,545, said Reuters technical analyst Wang Tao. TECH/C

Palladium XPD= fell 0.6% to $2,339.87, silver XAG= was flat at $17.76 and platinum XPT= edged higher by 0.1% to $961.28.

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