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PRECIOUS-Gold steadies as recovery fears offset stronger dollar

Published 08/09/2020, 01:57 pm
Updated 08/09/2020, 05:42 pm
© Reuters.
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* Japan's economy shrank more than initially estimated in Q2

* Gold poised to break support at $1,923/oz - technicals

* Investors focus on ECB policy decision on Thursday

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Recasts, updates prices)

By Brijesh Patel

Sept 8 (Reuters) - Gold prices steadied in a tight range on Tuesday, as doubts over a global economic recovery countered pressure from a stronger dollar ahead of policy strategies from central banks in Europe and North America.

Spot gold XAU= was steady at $1,929.50 per ounce by 0720 GMT. U.S. gold futures GCv1 rose 0.2% to $1,938.50.

"There is a bit of downside risk for USD denominated gold prices heading into this week's central bank meetings," said IG Markets analyst Kyle Rodda.

"If it's perceived they're (European Central Bank) jaw boning the currency, that could lead to another short-term lift in the USD and drag-on gold prices."

The dollar .DXY rose against its rivals, making gold more expensive for holders of other currencies. USD/

Offering support to gold, hopes around a swift economic rebound faded after data showed Japan's economy shrank more than initially estimated in the second quarter as capital expenditure took a hit from the pandemic. and major central banks have flooded the markets with unprecedented stimulus measures to mitigate the economic damage caused by the coronavirus, driving gold to new highs because of its role as a hedge against inflation and currency debasement.

Market participants' focus will now be on Bank of Canada's policy meeting on Wednesday, followed by the European Central Bank's policy decision on Thursday. The two-day U.S. Federal Reserve meeting is scheduled next week.

On the trade front, President Donald Trump on Monday again raised the idea of decoupling the U.S. economy from China, suggesting the United States would not lose money if the world's two biggest economies no longer did business. gold is poised to break a support at $1,923 per ounce and fall into $1,880-$1,906 range, said Reuters technical analyst Wang Tao. TECH/C

Elsewhere, silver XAG= fell 0.3% to $26.92 per ounce and platinum XPT= gained 0.5% to $912.28, while palladium XPD= climbed 0.7% to $2,309.44.

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