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PRECIOUS-Gold slumps over 1.5% on dollar rebound, economic recovery hopes

Published 2020-09-02, 11:13 a/m
© Reuters.
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* Dollar recovers from multi-year low

* Platinum slips over 4% to near two-week low

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Adds comments, updates prices)

By K. Sathya Narayanan

Sept 2 (Reuters) - Gold fell more than 1.5% on Wednesday as the dollar firmed and a strong rebound in U.S. manufacturing sector fuelled hopes of a rapid recovery in the coronavirus-hit economy.

Spot gold XAU= fell 1.6% to $1,939.66 per ounce at 1:50 p.m. EDT (1750 GMT). U.S. gold futures GCv1 settled down 1.7% at 1,944.70.

"The main factor is the stronger dollar. (Gold) is moving in a completely inverse direction to dollar today," Edward Meir, an analyst at ED&F Man Capital Markets said, adding good U.S. factory order number for July was also weighing on the metal.

The dollar .DXY rose 0.5%, further recovering from a more-than two-year low hit in the last session. USD/

New orders for U.S.-made goods increased more than expected in July, while Tuesday's U.S. manufacturing data showed activity accelerated to a near two-year high in August, increasing optimism about a steady recovery. private payrolls, on the other hand, increased less than expected in August, pointing to a slowing labor market recovery. far as the economy is concerned, you are going to get this small bounces in economic data but you are not going to get any significant change in the economy what so ever, not for a long time," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

Investors are now focusing on Thursday's initial U.S. jobless claims report and Friday's non-farm payroll data.

Gold should remain supported as buyers tend to step in on big dips on continued concerns of the pandemic and lower interest rate environment, George Gero, managing director at RBC Wealth Management, said in a note.

The safe-haven metal has gained about 27% so far this year.

Elsewhere, silver XAG= fell 3.2% to $27.27 per ounce and palladium XPD= declined 1.3% to $2,243.19.

Platinum XPT= dropped 4.2% to $901.62, having touched a near two-week low earlier.

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