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PRECIOUS-Gold rises to two-week high as dollar dives

 (Updates prices)
    * Dollar hits more than two-year low
    * Silver rises to three-week high
    * Interactive graphic tracking global spread of coronavirus:
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    By Diptendu Lahiri
    Sept 1 (Reuters) - Gold prices jumped more than 1% on
Tuesday to a near two-week high, following the steepest fall in
the dollar in more than two years as investors bet on U.S.
interest rates staying lower for longer.
    Spot gold        was up 1% to $1,989.78 per ounce by 1203
GMT, having earlier hit its highest since Aug. 19 at $1,991.91.
U.S. gold futures         also rose nearly 1% to $1,997.30.
    "The two drivers for gold are the weaker dollar and lower
yields and that will keep the metal moving between the range of
$1,800 and $2,100 until the U.S. presidential elections in
November," said Robin Bhar, an independent analyst.
    "However, at the end of every month we might see some
corrections as a result of speculators selling their positions."
    The dollar index        dropped to a more than two-year low,
making gold cheaper for holders of other currencies.       
    The U.S. Federal Reserve's new monetary policy plan, which
may lead to inflation rising marginally and long-term interest
rates staying lower, also weighed on U.S. Treasury yields.
            
    Low interest rates minimise the opportunity cost of owning 
non-yielding bullion, which is often used as a buffer against
inflation and currency depreciation.
    Gold has gained about 31% this year, also supported by
economic uncertainty stemming from the coronavirus pandemic.  
    While waning consumer demand remains a headwind, "strong
investor demand is likely to continue to provide support for
gold," Heraeus Precious Metals said in a note.
    "In the near term, gold could move sideways as it
consolidates following its rapid rally to record highs in early
August." 
    Elsewhere, silver        was up 2% to $28.79 per ounce,
after hitting its highest since Aug. 11.
    Platinum        rose 2.5% to $952.86 and palladium       
climbed 1.7 % to $2,280.47.

 (Reporting by Diptendu Lahiri in Bengaluru
Editing by Chizu Nomiyama)
  
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