PRECIOUS-Gold hits over 1-month low as stronger dollar dents appeal

Reuters

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    * Silver hits lowest level since Nov 2020 
    * Platinum hits 10-month low of $907.50/oz

 (Adds comment, updates prices)
    By Eileen Soreng
    Sept 20 (Reuters) - Gold prices hit a more than five-week
low on Monday, as the dollar firmed with markets closely
watching a U.S. Federal Reserve meeting for clues on when the
central bank will start tapering its pandemic-era stimulus.
    Spot gold  XAU=  fell 0.3% to $1,748.13 per ounce by 0500
GMT, having earlier touched its lowest level since Aug. 12 at
$1,741.86. 
    U.S. gold futures  GCv1  fell 0.2% to $1,748.60. 
    The dollar index  =USD  hit a near one-month high, hurting
gold's appeal for holders of other currencies.  USD/    
    The market is starting to think that a taper announcement
could be imminent and that there could be a hawkish surprise in
the dot plots, Stephen Innes, managing partner at SPI Asset
Management, said. 
    Bullion is seen as a hedge against the inflation and
currency debasement likely from the widespread stimulus. The
Fed's tapering could tackle both those conditions, diminishing
gold's appeal. 
    "It really looks like the markets turned quite bearish on
gold, with some critical support levels ($1,780 and $1,750)
giving away and this does open up for a test of $1,700," Innes
said.  
    The Fed is expected to open the door to reducing its monthly
bond purchases when it meets on Sept. 21-22, while tying any
actual change to U.S. job growth in September and beyond.
 urn:newsml:reuters.com:*:nL1N2QJ0Y4
    Higher interest rates raise the opportunity cost of holding
non-interest bearing gold. 
    "Gold's price action is ominous, especially as dollar
strength persists and US yields continue firming," Jeffrey
Halley, a senior market analyst for Asia Pacific at OANDA, said
in a note.   
    The precious metal is likely to test the $1,720 level with
longer-term support around $1,675, Halley said.   
    Elsewhere, silver  XAG=  fell 0.8% to $22.22 an once, after
earlier hitting its lowest level since November last year.
    Platinum  XPT=  slumped to a ten-month trough of $907.50 and
was last down 2.5% at $917.58. 
    Palladium  XPD=  slipped 3.2% to $1,952.69.  

 (Reporting by Eileen Soreng and Nakul Iyer in Bengaluru;
Editing by Devika Syamnath and Arun Koyyur)
 ((eileen.soreng@thomsonreuters.com; Within U.S. +1 646 223
8780, Outside U.S. +91 80 6749 6131; Reuters Messaging:
eileen.soreng.thomsonreuters.com@reuters.net))

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