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PRECIOUS-Gold hastens retreat, dips below $2,000 on firm dollar

Published 11/08/2020, 01:14 pm
Updated 11/08/2020, 06:06 pm
© Reuters.
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* Dollar rises to one-week high

* Gold consolidating after rapid rise - analyst

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

By Brijesh Patel

Aug 11 (Reuters) - Gold fell more than 1% on Tuesday, breaking below the $2,000 level for the first time in a week, as the dollar's relative value against other currencies strengthened and spurred investors to lock in profits following a record run.

Spot gold XAU= was down 1.1% at $2,004.61 per ounce by 0727 GMT after falling as much as 1.9% earlier, accelerating a retreat from a record high of $2,072.50 hit last week. U.S. gold futures GCcv1 fell 1.3% to $2,013.10 per ounce.

"A stronger dollar and favourable risk sentiment are weighing on gold. Prices are undergoing a period of consolidation after rising more than 14% in three weeks," said DailyFx strategist Margaret Yang.

Making gold more expensive for holders of other currencies, the dollar .DXY gained and U.S. bond yields rebounded from multi-month lows. USD/

Asian stocks, meanwhile, shrugged off the latest flare-ups between Washington and Beijing. MKTS/GLOB

China on Monday had imposed sanctions on 11 U.S. citizens, including lawmakers from President Donald Trump's Republican Party, after Washington's sanctions on Hong Kong and Chinese officials last week. said gold's overall appeal was still intact, with prices up over 33% this year.

"The retracement of the recent U.S. dollar sell-off can continue this week, putting downward pressure on gold," said Jeffrey Halley, a senior market analyst at OANDA.

"Gold trade attracted a lot of fast money last week and a washout of speculative long positioning sets gold up for a more balanced rally going forward."

Gold has been one of the most consistent gainers through the six months of coronavirus-led turmoil in financial markets, benefiting from a flood of capital into the world economy and investors seeking a relatively safe location to park money with interest rates at or near zero.

Elsewhere, silver XAG= dropped 3.5% to $28.13 per ounce, platinum XPT= fell 1.9% to $967.63 and palladium XPD= eased 0.4% to $2,210.62.

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