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Gold slips from one-week peak hit by stronger dollar
· Gold prices fell on Friday as the U.S. dollar rebounded, but the yellow metal was on track for a weekly gain underpinned by worries over a global economic recovery from the coronavirus-led slump.
· Spot gold was down 0.8% at $1,938.53 per ounce by 0308 GMT, after hitting its best level since September 2 at $1,965.94 on Thursday. Gold has gained 0.4% this week.
· U.S. gold futures fell 0.8% to $1,948.
· “A rebound in the U.S. dollar index sent gold prices lower following the European Central Bank’s neutral tone last night,” said Margaret Yang, a strategist with DailyFx, which covers currency, commodity and index trading.
· “The mid- to-long-term outlook remains bullish for gold, despite recent consolidation. An ultra-loose monetary policy and low yield environment is cushioning the downside.”
· The dollar index bounced back on Friday following a steep drop against the euro in the previous session and was on track for its best week since mid-May. A stronger greenback makes gold more expensive for holders of other currencies.
· Casting a shadow over hopes for a quick economic rebound, U.S. weekly jobless claims hovered at high levels last week, suggesting a slowing labor market recovery.
· Gold prices have climbed 28% this year as governments and major central banks pumped massive stimulus into the economy and kept interest rates low to alleviate the economic toll of the coronavirus.
· The U.S. Senate blocked a Republican bill that would have provided around $300 billion in new coronavirus aid, as Democrats push for more funding.
· Investors’ focus will now shift to British GDP data and U.S. inflation data due later in the day.
· Elsewhere, silver dropped 1.2% to $26.61 per ounce and palladium lost 0.7% to $2,278.86.
· Platinum eased 0.4% to $922.43, but was heading for its best week since week-ending August 7, up 3%.