PRECIOUS-Gold drops as dollar rises on Fed's upbeat economic view

Reuters

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    * Dollar hits more than one-week high
    * Fed to hold rates near zero until at least 2023
    * Platinum falls more than 2%
    * Interactive graphic tracking global spread of coronavirus:
https://graphics.reuters.com/world-coronavirus-tracker-and-maps/

 (Updates prices)
    By Brijesh Patel
    Sept 17 (Reuters) - Gold prices fell on Thursday as the
dollar climbed after the U.S. Federal Reserve painted a
favourable economic recovery picture but stopped short of
offering concrete signals on further stimulus.
    Spot gold  XAU=  was down 0.8% at $1,944.63 per ounce by
0700 GMT. U.S. gold futures  GCcv1  slipped 0.9% to $1,951.90.
    "Investors across the Asia-Pacific are perhaps not inspired
by last night's FOMC (Federal Open Market Committee) meeting, in
which the central bank seems to be reluctant to add stimulus in
view of improving fundamentals," said Margaret Yang, a
strategist with DailyFx, which covers currency, commodity and
index trading.
    "This led to a stronger U.S. dollar, and a weaker gold
price."
    The dollar index  .DXY  rose to a more than one-week high
against its rivals after the Fed signalled on Wednesday it
expected the U.S. economic recovery from the coronavirus crisis
to accelerate, with unemployment falling faster than the central
bank's forecast in June.  urn:newsml:reuters.com:*:nL1N2GC193  urn:newsml:reuters.com:*:nL1N2GD0O5  USD/ 
    Meanwhile, the Bank of Japan kept monetary policy steady and
slightly upgraded its view on the economy, suggesting that no
immediate expansion of stimulus was needed to combat the
coronavirus pandemic.  urn:newsml:reuters.com:*:nT9N2DM02F
    Offering gold some support, the Fed pledged to keep rates
pinned near zero levels until inflation was on track to
"moderately exceed" its 2% inflation target "for some time".
 urn:newsml:reuters.com:*:nL1N2GD0O5
    Lower interest rates decrease the opportunity cost of
holding non-yielding bullion. Gold is also used as a hedge
against inflation.
    "Lower-for-longer interest rates, continued quantitative
easing by central banks and the U.S. fiscal position potentially
debasing the dollar continue to be long-term supportive factors
for a higher gold price," said Jeffrey Halley, a senior market
analyst at OANDA.
    Elsewhere, silver  XAG=  dropped 1.7% to $26.78 per ounce,
platinum  XPT=  dipped 2.4% to $945.35 and palladium  XPD= 
slipped 1.4% to $2,366.91.

 (Reporting by Brijesh Patel in Bengaluru; Editing by Devika
Syamnath and Kevin Liffey)
 ((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848
5832, Outside U.S. +91 8067493865; Reuters Messaging:
Brijesh.Patel1.thomsonreuters.com@reuters.net))

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