(Recasts, adds comments, updates prices) * Dollar index firms, Wall Street slips * Palladium eases off one-month high hit on Wednesday * For an interactive graphic tracking the global coronavirus spread, open tmsnrt.rs/3aIRuz7 in an external browser By Eileen Soreng May 21 (Reuters) - Gold fell more than 1% on Thursday as investors booked profits from recent rallies and some switched to the safety of cash driven by growing U.S-China trade tensions and doubts about an economic recovery. Spot gold was down 1.5% to $1,722.78 per ounce by 2:49 a.m. EDT (1849 GMT), having earlier fallen to $1,716.44. U.S. gold futures settled 1.7% lower at $1,721.90. "Equities are significantly overbought, a lot of money plowed into the tech industry, so there's a fear trade out there once you start to unwind ... Gold will come under a bit of pressure as people try and raise capital," said Phil Streible, chief market strategist at Blue Line Futures in Chicago. "But it's not a throw the towel in on gold (situation). It's just backing off, that's all." Wall Street's main indexes eased as growing Sino-U.S. tensions and concerns about a recovery from a coronavirus-led economic slump soured sentiment. Wall Street's fear gauge rose 30 points for a brief time during the session. Gold has sometimes moved in tandem with equities this year, especially as sharp sell-offs prompted investors to sell the metal for cash or to cover margin calls. Also weighing on gold was a firmer dollar , which has been a rival safe haven amid rising U.S.-China trade tensions. But the latest slide in gold was also driven by profit-taking after recent strong gains, analysts said, with the metal having soared to its highest since October 2012 at $1,764.55 earlier this week. "However, the enormous amount of monetary stimulus in the system, the need for that to continue for some time and the inflation risk are all bullish for gold in the longer term." OANDA analyst Craig Erlam said. U.S. Federal Reserve policymakers acknowledged the possibility of further support measures if the economic downturn persists. Elsewhere, palladium dropped 3.7% to $2,023.73 an ounce after hitting a one-month high on Wednesday. Platinum shed 2.4% to $830.60 per ounce. Silver slipped 2.7% to $17.03. (Reporting by Eileen Soreng in Bengaluru; Editing by Tom Brown)
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