June 15, 2020 / 3:39 AM / 22 days ago

PRECIOUS-Gold slips as dollar firms amid second wave of coronavirus infections

    * SPDR Gold Trust holdings up 0.1% on Friday
    * Specs cut gold bullish positions in week to June 9 -CFTC
    * China May industrial output below expectations

 (Recasts, adds comment, updates prices)
    By Brijesh Patel
    June 15 (Reuters) - Gold prices dropped on Monday, as the
dollar hovered close to a more than one-week high, despite fears
of a second wave of coronavirus infections in Beijing denting
risk appetite.
    Spot gold        was down 0.5% at $1,720.56 per ounce as of
0640 GMT. U.S. gold futures        slipped 0.7% to $1,725.30.
    "Gold is caught between two conflicting forces. One is the
risk-off force weighing on stocks and industrial commodities and
supporting bonds and gold," said Michael McCarthy, chief
strategist at CMC Markets.
    "But against that we have a stronger U.S. dollar." ​      
      
    Gold prices jumped 2.6% last week, marking their best week
since April 10, as worries of a new wave of COVID-19 cases
clouded hopes of economic recovery.
    After weeks with almost no new coronavirus infections,
Beijing has recorded dozens of new cases in recent days, while
new virus cases and hospitalizations in record numbers swept
through more U.S. states.             
    Rising concerns about a resurgence of the disease dented
risk sentiment among investors, sending Asian stock markets and
oil prices lower.            
    "The economy is not doing well, we got COVID-19 again and a
low interest rate environment, I think gold remains bid," said
Stephen Innes, chief market strategist at financial services
firm AxiCorp.
    "But, we need significant policy input from the U.S. Federal
Reserve or governments to add that fourth level of stimulus to
get gold to bounce higher."
    Underscoring the impact of the virus, data showed China's
industrial output expanded less than expected in May as the
country struggles to get back on track.             
    SPDR Gold Trust holdings       rose 0.1% on Friday, while
speculators cut their bullish positions in COMEX gold and silver
contracts in the week to June 9.                  
    Elsewhere, palladium        was down 0.9% at $1,901.68 per
ounce, silver        fell 2.1% to $17.08, platinum       eased
0.2% to $803.77.

 (Reporting by Brijesh Patel in Bengaluru; Editing by Anil
D'Silva, Rashmi Aich and Krishna Chandra Eluri)
  
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