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PRECIOUS-Gold hits near 2-week high on weaker dollar, dovish Fed signals

    Aug 31 (Reuters) - Gold prices rose on Monday to their
highest level in nearly two weeks, as demand was boosted by a
weaker dollar and the U.S. Federal Reserve's new policy
framework suggested that interest rates would remain low for
some time.
    
    FUNDAMENTALS
    * Spot gold        was up 0.4% at $1,971.68 per ounce by
0043 GMT, after hitting its highest since Aug. 19 at $1,976 in
early Asian trade. However, gold is down nearly 0.2% so far this
month.
    * U.S. gold futures        rose 0.4% to $1,982.50.
    * Last week, Fed Chairman Jerome Powell said the central
bank would adopt an average inflation target, meaning rates are
likely to stay low for longer.             
    * Lower interest rates decrease the opportunity cost of
holding non-yielding bullion and weigh on the dollar, making
gold cheaper for investors holding other currencies.
    * The dollar index        fell 0.2% and was on track for its
fourth consecutive monthly decline.       
    * Asian shares notched a fresh two-year high as investors
wagered monetary and fiscal policies globally would stay super
stimulatory for a protracted period.            
    * Global coronavirus cases surged past 25 million on Sunday,
according to a Reuters tally, as India marked a worldwide record
for daily new cases in the COVID-19 pandemic.             
    * China's factory activity expanded at a slightly slower
pace in August.             
    * Japan's factory output rose for a second straight month in
July, while retail sales fell for a fifth straight month.
            
    * Speculators reduced their bullish positions in COMEX gold
and raised them in silver contracts in the week to Aug. 25.
       
    * On the physical side, dealers in India offered the highest
discounts on gold in five months last week as a dip in domestic
prices failed to revive demand.         
    * Silver        jumped 1.7% to $27.94 per ounce, platinum
       rose 0.4% to $935.06, and palladium        gained 0.6% to
$2,217.77.
    
    DATA/EVENTS (GMT)
1200   Germany  CPI, HICP Prelim YY    Aug

 (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu
Sahu)
  
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