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Gold edges higher as dollar halts surge on COVID worries

Published 22/09/2020, 11:30 am
© Reuters.
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Sept 22 (Reuters) - Gold prices on Tuesday inched up after slumping 3.4% in the previous session, as the resurgent dollar held on to overnight gains, while economic concerns over fresh rounds of coronavirus-induced lockdowns across Europe also helped buoy the metal.

FUNDAMENTALS

* Spot gold XAU= rose 0.3% to $1,918.20 per ounce by 1252 GMT. Bullion prices fell to their lowest level since Aug. 12 at $1,882.70 on Monday as the U.S. dollar soared to an almost six-week high.

* A firmer dollar makes bullion more expensive for holders of other currencies.

* U.S. gold futures GCv1 gained 0.6% to $1,921.50 on Tuesday.

* The dollar index .DXY was down 0.1% against its rivals, after having strengthened to its highest in more than a month on Monday.

* The Federal Reserve remains committed to using all the tools at its disposal to help the U.S. economy recover from the blow delivered by the coronavirus pandemic, Chair Jerome Powell said on Monday, ahead of his three-day of testimony to Congress this week. A surge in fresh coronavirus infections in countries such as France, Austria or the Netherlands are worrying, German Health Minister Jens Spahn said on Monday, adding that Germany will sooner or later import cases from there. Gold, which is often used as a safe store of value during times of political and financial uncertainty, has risen nearly 26% this year.

* Britain will face an exponentially growing death rate from COVID-19 within weeks unless urgent action is taken to halt a rapidly spreading second wave of the outbreak, the country's senior medics said on Monday. The world's largest 50 investment banks are on track to double their income from precious metals this year to around $2.5 billion, most of it from gold, Coalition, a banking consultancy, told Reuters. Silver XAG= gained 1.1% to $25 per ounce, platinum XPT= was up 0.6% to $886.20 and palladium XPD= rose 0.5% to $2,285.44.

DATA/EVENTS (GMT)

1400 US Existing Home Sales

Aug

1400 EU Consumer Confid. Flash Sept

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