PRECIOUS-Gold falls on stronger dollar, economic rebound hopes

  • Reuters
  • Commodities News
PRECIOUS-Gold falls on stronger dollar, economic rebound hopes
Credit: © Reuters.

* Dollar index gains 0.2%

* Gold hits over one-week low

* GRAPHIC: Tracking the vaccine race

* Graphic tracking world spread of coronavirus: (Updates prices)

By Sumita Layek

Nov 19 (Reuters) - Gold slipped as much as 1% on Thursday as the dollar edged higher and progress in COVID-19 vaccine development boosted hopes of a faster economic rebound and tempered bets for an immediate U.S. coronavirus relief package.

Spot gold XAU= was down 0.4% to $1,863.81 per ounce at 01:49 p.m. EST (1849 GMT), after hitting its lowest since Nov. 9 at $1,851.83. U.S. gold futures GCv1 settled 0.7% lower at $1,861.50.

A stronger dollar and uncertainty over further economic stimulus are weighing on gold, said Jeffrey Sica, founder of Circle Squared Alternative Investments.

"Though there's an anticipation for more (stimulus), some people are electing to take profits until there's more clarity."

The dollar .DXY , a rival safe haven, rose 0.2% against a basket of major currencies, as coronavirus cases surged globally. USD/ tends to benefit from economic stimulus since it's considered a hedge against inflation and the currency debasement it can trigger.

Optimism over progress in the development of coronavirus vaccines, which could be ready for U.S. authorisation within weeks, has also dented bullion's appeal. removed some of the longer-term uncertainty when it comes to the virus. So although there are concerns about the short-term implications of the spike, longer term, people are a lot more optimistic, which is probably why we've seen somewhat of a pullback in gold," Sica said.

An unexpected rise in new U.S. jobless claims also didn't help gold. .N having this clash of fear over the present COVID-19 conditions, and then we've the hope of the vaccines coming in a few months, so that's kind of tugging the markets back and forth," Kitco Metals senior analyst Jim Wyckoff said.

"Gold traders are now focusing on the next few months, with the dark winter amid the pandemic that could impact consumer demand for gold."

Silver XAG= dipped 1.2% to $24.02 per ounce. Platinum XPT= was steady at $942.78, while palladium XPD= eased 0.2% to $2,325.15.

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