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Gold retreats more than 1% as dollar halts slide

Published 30/07/2020, 08:50 pm
© Reuters.
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* Gold up more than 28% so far this year

* Fed pledges to keep interest rates near zero

* Spot gold may test support at $1,943/oz - technicals

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

By Eileen Soreng

July 30 (Reuters) - Gold fell on Thursday as the dollar stalled its slide, with analysts saying bullion may face more resistance in its bid to breach the $2,000 level.

Spot gold XAU= was 1.0% lower at $1,951.42 per ounce by 1220 GMT, having earlier fallen as much as 1.3% to $1,944.76.

U.S. gold futures GCcv1 eased 0.4% to $1,946.50.

The dollar found some support after the U.S. Federal Reserve in a policy update offered no real clues about its next moves beyond a reiteration of its easy monetary stance.

Dollar bears had speculated the Fed might loosen its approach to inflation. USD/ we are getting a little bit of a better bid on the dollar, although its still pretty much on its knees, and because of that we've seen a bit of correction in gold," said Afshin Nabavi, senior vice president at precious metals trader MKS SA.

Gold jumped to near a record high on Wednesday after the Fed pledged to keep interest rates near zero. But initial gains in equities led by Wall Street overnight, and now a bounce in rival safe-haven the dollar - making gold less attractive to holders of other currencies - cut short the climb. MKTS/GLOB

But the non-yielding metal, which benefits from low interest rates and is considered insurance against currency debasement and high inflation, is still up over 28% this year, supported by strong investment demand from Europe and North America, which has offset weak physical consumption in top Asian hubs. macro environment is still quite friendly for gold - there's plenty of geopolitical risks and the monetary accommodation is still very significant across many central banks," Bank of China International analyst Xiao Fu said.

"It's just that $2,000 is very strong psychological resistance level and people are a bit nervous about gold's valuation." USD/

Prices may test support at $1,943 per ounce, said Reuters technical analyst Wang Tao. TECH/C

Other metals were also lower, with silver XAG= shedding 4.3% to stand at $23.37 per ounce, platinum XPT= down 1.7% to $908.87 and palladium XPD= off 4.4% at $2,063.41.

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