June 11, 2020 / 4:28 AM / a month ago

PRECIOUS-Gold slips on profit-taking after Fed-driven rally

    * Fed vows to keep monetary policy easy
    * Silver falls after 3.8% jump on Wednesday
    * Markets await weekly jobless claims due later in the day

 (Updates prices; adds comments, detail about U.S. jobless
claims)
    By Harshith Aranya
    June 11 (Reuters) - Gold eased on Thursday as investors
booked profits after prices rose to a more than one-week high on
bleak economic projections from the U.S. Federal Reserve.
    Spot gold        was down 0.5% at $1,728.40 per ounce by
0634 GMT, after hitting its highest since June 2 at $1,739.68
earlier in the session. U.S. gold futures         climbed 1% to
$1,737.80.
    "Gold has struggled around these levels repeatedly over the
last couple of months, which is probably why we're seeing profit
taking kicking in once again," OANDA analyst Craig Erlam said.
    "We're also seeing a bit of a rebound in the dollar, which
is likely weighing on gold prices today."       
    On Wednesday, spot gold prices rose 1.3%, their biggest
daily percentage rise in more than a month, after the Fed said
it would be a long road to recovery from the coronavirus-induced
slump.
    The U.S. central bank repeated its promise of continued
extraordinary support, and also flagged the need to keep the key
interest rate near zero through at least 2022.             
    Large stimulus measures and low interest rates tend to
support gold, which is often considered a hedge against
inflation and currency debasement.
    "Macro uncertainty, lower interest rates and accommodative
central banks should remain long-term supports (for gold)," ANZ
analysts wrote in a note.
    As the pandemic shows no signs of slowing down, so will
uncertainty and that along with rising trade tensions should
keep strong safe-haven demand for gold, ANZ added.
    Investors await the U.S. weekly jobless claims data due
later in the day. While layoffs are slowing, millions still
remain unemployed, suggesting the labour market could take years
to heal from the pandemic.             
    Among other metals, silver         declined 2.5% to $17.79
per ounce, after rising 3.8% on Wednesday.
    Palladium        fell 0.5% to $1,937.88 per ounce, and
platinum        slipped 0.7% to $826.66.

 (Reporting by Harshith Aranya and Brijesh Patel in Bengaluru;
Editing by Subhranshu Sahu & Aditya Soni)
  
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