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PRECIOUS-Gold falls as safe-haven appeal shifts to dollar

Published 28/01/2021, 02:57 pm
© Reuters.
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(Updates prices)

* Dollar hovers close to a more than 1-week high

* Gold in short-term period of consolidation- analyst

* Palladium hits lowest since Dec. 21

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

By Sumita Layek

Jan 28 (Reuters) - Gold prices fell on Thursday as investors flocked to the safety of the dollar after global equity markets slipped and the Federal Reserve raised concerns about the pace of economic recovery in the United States.

Spot gold XAU= fell 0.5% to $1,834.59 per ounce by 0744 GMT. Prices had fallen to their lowest since Jan. 18 at $1,830.80 on Wednesday. U.S. gold futures GCv1 shed 0.6% to $1,833.50.

"The market seems to be very disappointed with the Fed... we didn't get anything additional in terms of policy guidance or stimulus prospects, so that sunk risk assets, pushed the dollar up and gold got caught in that trade," said IG Market analyst Kyle Rodda.

"Gold seems to be in a short-term period of consolidation."

The Fed said the pace of the recovery in U.S. economic activity and employment had moderated in recent months, but kept its key interest rates and monthly bond purchases unchanged. further on gold was the delay in a $1.9 trillion U.S. coronavirus stimulus deal, which has not received a green signal from Republicans over concerns about the price tag. dollar .DXY hovered close to a more than one-week high hit in the previous session as Asian shares fell, unsettled by a sell-off on Wall Street. USD/ MKTS/GLOB

However, if equities continue to decline, safety buying could come back into gold, said Harshal Barot, a senior research consultant for South Asia at Metals Focus.

"We are going to see more global fiscal and monetary measures. There are concerns about stock market valuations, elevated government debts, so macro environment is still very positive for gold."

Silver XAG= lost 1.4% to $24.90 an ounce and platinum XPT= fell 1.4% to $1,051.14.

Palladium XPD= dipped 0.3% to $2,296.55 after touching its lowest since Dec. 21 earlier in the session.

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