Economic news

Gold Subdued as Dollar Strength Hurts Safe-Haven Appeal

* Spot gold may test support at $1,773/oz - technicals

* WPIC switches 2021 platinum forecast from deficit to surplus

* Platinum hits lowest level since Aug. 20 

Sept 9 (Reuters) - Gold dipped on Thursday as the U.S. dollar strengthened with global economic growth worries dragging risk sentiment, while investors sought cues from major central banks as policymakers signalled support for tapering pandemic-era stimulus.

Spot gold fell 0.1% to $1,788.11 per ounce by 0634 GMT, hovering close to a two-week low hit in the previous session.

U.S. gold futures eased 0.2% to $1,789.70. Rival safe haven, the dollar, was steady after rising for three straight days.

“Dollar strength places gold in grave danger of a material fall in prices,” said Jeffrey Halley, a senior market analyst for Asia Pacific at OANDA, with investors continuing to worry about the pace of the global recovery and pushing the greenback higher.

Asian shares were set for their worst day in two weeks.

The U.S. economy “downshifted slightly” in August as the renewed COVID-19 surge hit dining, travel and tourism, the U.S. Federal Reserve reported on Wednesday.

However, several Fed policymakers have signalled that the central bank remains on track to trim its massive asset purchases this year. Officials will meet again on Sept. 21 and 22.

Markets also eyed the European Central Bank’s policy decision due at 1145 GMT, where it could take a token step towards unwinding emergency economic aid while still signalling copious support for years to come.

Non-yielding gold tends to gain in a low interest-rate environment, while some investors also view the metal as a hedge against the higher inflation that could follow stimulus measures.

Spot gold could test a support at $1,773, a break below which could cause a fall to $1,739, according to Reuters technical analyst Wang Tao.

Silver fell 0.3% to $23.88 per ounce, while palladium rose 0.2% to $2,256.69.

Platinum hit a near three-week low of $971.49 and was last down 0.5% at $975.17.

The World Platinum Investment Council (WPIC) expects the global platinum market to be in surplus this year as mine supply ramps up and investment demand falls.

Reporting by Eileen Soreng in Bengaluru; editing by Uttaresh.V and Devika Syamnath

Source: Reuters

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