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PRECIOUS-Gold crawls higher as Fed reiterates economic woes

    * European shares dip on Fed's view on economic recovery
    * Dollar hits one-week high
    * Gold shed more than 3.5% on Wednesday
    * Interactive graphic tracking global spread of coronavirus:
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tmsnrt.rs/3aIRuz7 in an external browser

 (Updates prices)
    By Eileen Soreng
    Aug 20 (Reuters) - Gold inched up on Thursday, regaining
ground from a more than 3% slide the previous session after the
U.S. Federal Reserve minutes highlighted the uncertainties
surrounding economic recovery from a pandemic-induced slump and
dented risk appetite. 
    Minutes from the U.S. central bank's last policy meeting
showed policymakers were concerned the economy faced a highly
uncertain path and more monetary support may be needed.
            
    But policymakers downplayed the need for yield caps and
targets. 
    Spot gold        rose 0.1% to $1,931.76 per ounce by 1114
GMT. U.S. gold futures         fell 1.6% to $1,938.50.
    "The belief is still that the Fed is most certainly not
going to allow interest rates to rise at this point in time and
that some kind of control cannot be ruled out," said Saxo Bank
analyst Ole Hansen, adding, the market still sees dips as a
buying opportunity. 
    "The direction of the dollar and bond yields will continue
to set the agenda."
    The Fed's economic view prompted a wave of selling in global
equity markets.            
    Capping gold's gains, the dollar index        was up 0.2%
against rival currencies, rebounding from an over two-year low.
       A higher dollar makes gold expensive for holders of other
currencies.
    "The main fundamentals behind gold have not changed," said
Edward Meir, an analyst at ED&F Man Capital Markets.
    "Stimulus is still coming in and it's very pre-mature to say
we're recovering globally and should see higher rates and
stronger dollar; we are many months away from that."     
    Central banks have rolled out massive stimulus and cut
interest rates to near zero to combat the economic toll from the
new coronavirus crisis, prompting over 27% gains for the year in
gold, considered a hedge against inflation and currency
debasement.             
    Elsewhere, silver        gained 0.8% to $26.94 per ounce,
platinum        dipped 0.4% to $928.38, and palladium       
inched up 0.1% to $2,159.12.

 (Reporting by Eileen Soreng and Brijesh Patel in Bengaluru;
editing by Barbara Lewis and Elaine Hardcastle)
  
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