PRECIOUS-Gold falls further as stocks jump to near 3-month high

Published 03/06/2020, 01:49 pm
Updated 03/06/2020, 05:30 pm
© Reuters.
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* Dollar index falls to over 2-month low

* SPDR gold holdings gain for 6th day

* For an interactive graphic tracking the global coronavirus spread, open https://tmsnrt.rs/3aIRuz7 in an external browser (Adds comments, recasts with updated prices)

By Harshith Aranya

June 3 (Reuters) - Gold fell for a second straight session on Wednesday as stocks jumped on hopes for further stimulus and optimism about an economic recovery, dampening demand for the safe-haven metal.

Spot gold XAU= slipped 0.3% to $1,721.86 per ounce by 0626 GMT, after declining 0.7% on Tuesday. U.S. gold futures GCcv1 fell 0.4% to $1,726.90.

"There are a lot of investors who bought gold as a hedge for stocks, but stocks are going up and they don't see value in that now," said Stephen Innes, chief market strategist at financial services firm AxiCorp.

Reducing the appeal of gold, global shares vaulted to a near three-month high amid signs of a recovery in business activity as governments restart their economies. MKTS/GLOB

Governments and central banks around the globe have unleashed unprecedented fiscal and monetary stimulus for their economies floored by the coronavirus pandemic. now await a meeting of the European Central Bank on Thursday and hope that it will deliver additional stimulus, by around 500 billion euros. the weak economic backdrop continues to provide some support, with investors continuing to pile into gold-backed ETFs," ANZ analysts wrote in a note.

Holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose for the sixth straight session on Tuesday. GOL/ETF

Meanwhile, the dollar index .DXY fell to a more than two-month low, and demonstrations continued against police brutality in the United States, providing some support to the metal. USD/ is not much pressure on gold to fall below the $1,700 level, Innes said, adding that investors would continue to buy it on dips amid low interest rates and prevailing uncertainties.

In other metals, palladium XPD= rose 1.6% to $1,980.42 per ounce, while platinum XPT= fell 0.3% to $836.76.

Silver XAG= fell 1.2% to $17.87, having hit its highest since Feb. 25 on Monday.

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