June 10, 2020 / 10:02 AM / 22 days ago

PRECIOUS-Gold gains for a third day on hopes of dovish U.S. Fed

    * U.S. Fed policy decision due at 1800 GMT
    * Dollar falls to near three-month low
    * Gold to reach $1,800/oz on a 12-month basis - Goldman

 (Updates prices)
    By K. Sathya Narayanan
    June 10 (Reuters) - Gold rose for a third straight session
on Wednesday, helped by a weaker dollar and expectations the
Federal Reserve will maintain its accommodative policy to
support the U.S. economy.
    Spot gold        rose 0.4% to $1,721.16 per ounce by 1129
GMT, having jumped more than 1% in the last session. U.S. gold
futures         gained 0.3% to $1,727.20.
    "While you can be optimistic about the fact that the U.S.
economy did add some jobs, that doesn't necessarily mean the
crisis is over," said Michael Hewson, chief market analyst at
CMC Markets UK.
    The Fed was likely to remain fairly easy for some time and
the economic outlook was likely to remain cloudy, Hewson said,
adding that a weaker dollar was helping prices.
    The dollar        fell to a near three-month low against
rival currencies before the Fed's monetary policy meeting at
1800 GMT.       
    U.S. central bankers will be publishing their first economic
projections since the coronavirus crisis led to recession in
February.             
    "Gold traders would be looking to clues from the Fed as to
the reality of a V-shaped economic recovery or whether stock
market investors have gone ahead of themselves in assuming a
V-shaped recovery," Phillip Futures said in a note.            
    Easy monetary policy tends to benefit non-yielding gold and
weighs on dollar and Treasury yields. Gold is also seen as a
safe-haven during economic uncertainties.
    The global economy will suffer the biggest peace-time
downturn in a century, the OECD said on Wednesday.             
    Goldman Sachs expects gold to reach $1,800 per ounce on a
12-month basis and the tail risk of above-target inflation as a
potential driver for prices to climb beyond $2,000.             
    Elsewhere, silver        rose 0.8% to $17.72 an ounce,
palladium        gained 0.6% to $1,951.83, while platinum       
fell 0.6% to $831.87.

 (Reporting by K. Sathya Narayanan in Bengaluru; Editing by
Edmund Blair)
  
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