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PRECIOUS-Gold near six-week low as firmer dollar weighs

Published 11/01/2021, 10:12 pm
Updated 12/01/2021, 02:06 am
© Reuters.
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* Platinum falls over 5%

* Worldwide COVID-19 cases surpass 90 million

* Dollar hits a near three-week peak

* Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa (Updates prices)

By Eileen Soreng

Jan 11 (Reuters) - Gold fell on Monday, hovering close to a six-week trough hit earlier in the session, pressured by a robust dollar and higher U.S. Treasury yields amid expectations of more fiscal stimulus.

Spot gold XAU= fell 0.9% to $1,832.60 per ounce by 1425 GMT, after touching its lowest since Dec. 2 at $1,816.53. Gold last week recorded its biggest percentage fall since late November.

U.S. gold futures GCv1 eased 0.1% to $1,833.10.

Fawad Razaqzada, market analyst with ThinkMarkets, said that gold was retreating because of the dollar making further gains.

But this trend is likely to be short-lived and "there is an increased potential for gold to go higher in medium-term," with the massive amount of liquidity also likely to support demand for physical gold, he added.

The dollar index .DXY scaled a near three-week peak, amid gains in the U.S. 10-year Treasury yield US10YT=RR . US/ USD/

Julius Baer analyst Carsten Menke said in a note the bank was "neutral" on the outlook for gold.

"We believe safe-haven demand (for gold) should fade further as we project a resumption of the economic recovery despite renewed lockdowns in many European countries," Menke added. Reserve Vice Chair Richard Clarida on Friday said the U.S. economy was headed for an "impressive" year, helped by vaccines and larger spending. gold will continue to be supported by the low interest rate environment, analysts said.

"Positive for gold is that central banks are going to be dovish for the long term... It has built a solid support area around $1,830 and there's a good chance of gold recovering to $1,880 or $1,900," said ActivTrades chief analyst Carlo Alberto De Casa.

Meanwhile, world shares came off record highs on caution over rising coronavirus cases. MKTS/GLOB

Elsewhere, silver XAG= fell 2.9% to $24.62 per ounce, having earlier fallen to a near one-month low of $24.30.

Silver "should continue moving in gold's slipstream," Menke added.

Platinum XPT= dropped 5.1% to $1,010.15 per ounce, while palladium XPD= slipped 1% to $2,346.85.

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