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PRECIOUS-Gold firms on soft dollar as focus turns to Fed

Published 17/08/2020, 08:05 pm
© Reuters.
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* U.S. Federal Reserve minutes due on Wednesday

* Dollar falls to one-week low

* Palladium up 2.3%

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

(Updates prices)

By Nakul Iyer

Aug 17 (Reuters) - Gold rose on Monday, consolidating around the $1,950 mark after sliding 4.5% last week, buoyed by a weaker dollar as investors await the fine print on the U.S. Federal Reserve's strategy to stem the economic toll from the coronavirus.

Spot gold XAU= rose 0.6% to $1,954.74 an ounce by 1157 GMT and U.S. gold futures GCcv1 rose 0.7% to $1,963.00.

Gold last week registered its biggest decline since March as investors reassessed positions after bullion retreated from a record peak of $2,072.50 scaled on Aug. 7.

"We're seeing a consolidation phase after last week's sell-off," said ActivTrades chief analyst Carlo Alberto De Casa, adding that "interest for gold remains elevated".

The market is trying to find a new equilibrium, but signs of further dovish central bank policy and a move above $1,960 could provide space for further rallies, he said.

Coronavirus cases, meanwhile, continued to surge globally, especially in the United States and India, casting a shadow over hopes of an economic recovery. supporting gold, the dollar fell to a more than one-week low, making the yellow metal cheaper for those holding other currencies. .DXY USD/

The minutes from the Fed's last policy meeting are due on Wednesday, with markets looking for any hints of a possible change to its guidance at its next review in September there is something strong (from the Fed), more than what's already priced in", gold could rise again to $2,000, said ActivTrades' Carlo.

Unprecedented global stimulus measures in response to the COVID-19 pandemic, which have fuelled fears of inflation and currency debasement, have helped gold prices to climb more than 28% this year. the outlook remains constructive for gold, there are indications the recent correction could have room to run in the short-term, said IG Markets analyst Kyle Rodda.

In other precious metals, silver XAG= rose 2% to $26.93 an ounce, platinum XPT= gained 2.1% to $955.54 and palladium XPD= was up 2.3% at $2,157.68.

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