June 15, 2020 / 3:22 PM / 23 days ago

PRECIOUS-Gold falls over 1% on stronger dollar amid new fears of COVID wave

    * Dozens of new coronavirus cases in Beijing, record rise in
U.S.
    * Specs cut gold bullish positions in week to June 9 -CFTC

 (Updates prices)
    By Diptendu Lahiri
    June 15 (Reuters) - Gold fell more than 1% on Monday as the
dollar hovered near a more than one-week high, but the metal
held above $1,700 an ounce, buoyed by fears of a second wave of
coronavirus infections.    
    Spot gold        fell 0.2% to $1,726.61 per ounce by 02:04
p.m. ET (1804 GMT). U.S. gold futures         settled 0.6% down
at $1,727.20.
    "In a risk-off mood, the dollar becomes a favorable asset
and that's pressuring gold," said David Meger, director of
metals trading at High Ridge Futures.
    "But since the U.S. Federal Reserve meeting, we have been
crawling down because the gold market did not get more monetary
stimulus from the Fed; no additional rate cuts or asset
purchases."
    The Fed maintained its key overnight interest rate in the
target range of zero to 0.25 percent last week.             
    Against a basket of currencies, the dollar eased        but
still held near a more than one-week high hit in the previous
session.
    Beijing has recorded dozens of new cases in recent days,
while new infections in record numbers swept through more U.S.
states.             
    Bullion also faces deflationary pressures in the short term,
said Saxo Bank analyst Ole Hansen.
    "Inflation is collapsing with the drop in consumer demand
and the slow reopening of economies," Hansen said. "So that's
removing the demand for gold."
    Speculators cut their bullish positions in COMEX gold and
silver contracts in the week to June 9.        
    On the technical front, "there is a lot of resistance at
around $1,740 and the flow of funds is not sufficient," said
Bart Melek, head of commodity strategies at TD Securities.
    But virus fears pressured Wall Street, keeping gold above
the key psychological level of $1,700 an ounce, with analysts
saying the long-term trajectory for gold was still positive.
           
    Palladium        rose 1% to $1,937.97 an ounce, platinum
       rose 1.6% to $818.53 per ounce, after touching a
one-month low of $780.05, and silver        fell 0.3% to $17.38,
having earlier hit a near three-week low of $16.93.

 (Reporting by Diptendu Lahiri and Eileen Soreng in Bengaluru;
editing by Richard Chang and Steve Orlofsky)
  
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