June 17, 2020 / 3:49 PM / 2 months ago

PRECIOUS-Gold holds steady on fresh virus concerns, Fed outlook

    * Wall Street indexes inch higher in choppy trading
    * Confirmation of 'second wave' could push gold to $1,740
-analyst
    * Beijing cancels scores of domestic flights 

 (Updates prices)
    By Diptendu Lahiri
    June 17 (Reuters) - Gold prices were little changed on
Wednesday, buoyed by concerns over a second coronavirus wave and
expectations that the U.S. Federal Reserve would maintain low
interest rates in the near term, while a firm dollar put a lid
on gains.
    Spot gold        was little changed at $1,726.24 per ounce
by 2:24 p.m. ET (1824 GMT).    
    U.S. gold futures         settled slightly down at
$1,735.60.
    While the strength in the dollar and, initially, U.S. stock
markets have weighed on gold, the fact that Fed Chair Jerome
Powell does not foresee any interest rate hikes in the near
future makes it "better to be a long-term investor in gold,
buying the metal at every small pullback," said Michael
Matousek, head trader at U.S. Global Investors.
    Denting any advance in gold, the dollar also benefited from
safe-haven flows.       
    With a full U.S. economic recovery out of reach until the
coronavirus pandemic is brought to heel, the Federal Reserve
will use its "full range of tools" to cushion households and
businesses, Powell told lawmakers.             
    Lower interest rates reduce opportunity cost for holding
non-yielding bullion.
    The S&P 500        and the Dow        edged higher in choppy
trading on Wednesday as hopes of a swift recovery from a
coronavirus-driven downturn were dented by fears of a record
rise in coronavirus cases in six U.S. states.     
    Meanwhile in China, Beijing cancelled scores of domestic
flights on Wednesday, ramping up attempts to contain a renewed
outbreak of the coronavirus.             
    The gold market is more long than short overall, so
investors are taking advantage of any rallies, trading in a
range of $1,730-$1,735 on the upside and $1,710-$1,715 on the
downside, said Afshin Nabavi, senior vice president at precious
metals trader MKS SA.
    Elsewhere, palladium        fell 0.5% to $1,922.78 an ounce
and platinum        was down 0.3% at $818.10, while silver
       gained 0.8% to $17.53.

 (Reporting by Diptendu Lahiri and Eileen Soreng in Bengaluru
Editing by Jonathan Oatis and Steve Orlofsky)
  
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