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PRECIOUS-Gold falls below $2,000/oz as dollar slide halts

Published 19/08/2020, 08:30 pm
© Reuters.
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* Fed meeting minutes due at 1800 GMT

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

By Eileen Soreng

Aug 19 (Reuters) - Gold dipped below $2,000 an ounce on Wednesday partly in response to a pause in the dollar's slide as investors awaited more details on the U.S. Federal Reserve's strategy to revive the pandemic-hit U.S. economy.

Spot gold XAU= fell 0.8% to $1,984.74 per ounce by 1201 GMT, having hit a one-week high of $2,014.97 on Tuesday.

U.S. gold futures GCcv1 were down 1.1% at $1,991.20.

The dollar was up 0.1% versus major currencies .DXY , pausing its slide that has pushed the currency to a more than two-year low on Tuesday. USD/

While gold dipped on the steadier dollar, expectations of further dollar weakness could prompt gold to "carve out a more sustained presence above $2,000 and reach new record highs," said FXTM market analyst Han Tan.

"The release of the latest FOMC minutes could offer another gust of wind in bullion bulls' sails, especially if there is an obvious signal that the Fed is willing to tolerate faster U.S. inflation," Tan added.

Minutes from the Fed's last meeting are due at 1800 GMT, with investors looking out for any hints on further action it could take in September. But no change in policy rates is expected until end-2021.

Commerzbank (DE:CBKG) analyst Daniel Briesemann attributed the latest retreat in gold to profit taking, given the gain of about $80 in bullion this week.

"In the mid to long term, the sentiment towards gold is still very upbeat because of the ultra loose monetary policy pursued by the central banks."

Money-printing by central banks amid near-zero interest rates to ease the economic fallout from the pandemic have bolstered gold's appeal as a hedge against inflation and currency debasement, driving its gains of more than 30% so far this year. Gold touched an all-time peak of $2,072.50 on Aug. 7.

Elsewhere, silver XAG= was 1.4% lower at $27.28 per ounce. Platinum XPT= fell 1.7% to $940.05 and palladium XPD= was down 0.8% at $2,170.68 per ounce.

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