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PRECIOUS-Gold slides over 1% after Trump pauses U.S. stimulus talks

    * U.S. economic recovery remains far from complete- Fed's
Powell
    * Gold slides from 2-week high of $1,920.71/oz
    * Platinum, silver shed more than 4%
    * Interactive graphic tracking global spread of coronavirus:
here

 (Recasts, updates prices, adds comments)
    By Arundhati Sarkar and Swati Verma
    Oct 6 (Reuters) - Gold declined over 1% on Tuesday,
retreating from a two-week high hit earlier, after U.S.
President Donald Trump called off negotiations for a coronavirus
relief stimulus package until after the election.
    Spot gold        dropped 1.4% to $1,886.01 per ounce by 4:06
p.m. EDT (2006 GMT). U.S. gold futures         fell 1.6% to
$1,890.20 in post-settlement trade after closing 0.6% lower at
$1,908.80.
    "Gold prices have come under further pressure as President
Trump has paused negotiations over the fiscal stimulus package,
the dollar has strengthened and weighed on gold prices," said
Standard Chartered analyst Suki Cooper.                    
    Trump's surprise move came after U.S. House of
Representatives Speaker Nancy Pelosi said on Sunday that
progress was being made in her negotiations with the Trump
administration on a relief bill.                         
    Gold tends to benefit from widespread stimulus measures from
central banks as it is widely viewed as a hedge against
inflation and currency debasement. Bullion hit its highest level
since Sept. 21 at $1,920.71 earlier on Tuesday.
    "Gold needs to hold $1,880 or we could revisit $1,850, but I
do feel strongly that this move is temporary, it's not like a
deal was imminent," said Tai Wong, head of base and precious
metals derivatives trading at BMO.
    Earlier in the day, Federal Reserve Chair Jerome Powell
warned the U.S. economic recovery remains far from complete and
could still slip into a downward spiral if the coronavirus is
not effectively controlled and growth sustained.             
    "The reason that the market is hoping for a fiscal deal is
because in our view, gold has actually conditioned from a safe
haven asset into an inflation hedge asset," said Daniel Ghali,
commodity strategist at TD Securities.
    "As an inflation hedge asset, the bottleneck here is
actually inflation expectation. The market would need to see
them rise further to pull real rates lower and gold higher."
    Elsewhere, silver        shed 4% to $23.37 per ounce,
platinum        declined 4.6% to $856.15, while palladium       
eased 0.9% to $2,341.77.

 (Reporting by Arundhati Sarkar and Swati Verma in Bengaluru
Editing by Sonya Hepinstall)
  
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