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PRECIOUS-Gold drops as dollar surges to six-week high

    * Jerome Powell to appear at congressional committee from
1430 GMT
    * Silver falls as much as 3.8%
    * Interactive graphic tracking global spread of coronavirus:
here

 (Recasts, adds comments, updates prices)
    By Eileen Soreng
    Sept 22 (Reuters) - Gold prices slipped on Tuesday following
a sharp drop the previous day, as the dollar hit multi-week
highs ahead of U.S. Federal Reserve Chair Jerome Powell's
appearance at a congressional committee.
    Spot gold        fell 0.9% to $1,895.38 per ounce by 0738
GMT. Prices fell more than 3% to $1,882.70 on Monday, the lowest
level since Aug. 12.
    U.S. gold futures        were down 0.5% at $1,900.20 on
Tuesday.
    "Resurfacing of the coronavirus and the fear that European
countries will again go into lockdowns are triggering safe-haven
buying in the dollar index and because of that we have seen
correction in the gold prices," said Vandana Bharti, assistant
vice-president of commodity research at SMC Comtrade.
    "We may see gold hitting $1,880-$1,890 level before
recovering," she added.
    The dollar index        was up 0.1% to a near six-week peak
against its rivals. A stronger greenback makes bullion more
expensive for holders of other currencies.       
    Meanwhile, investors also fretted over the chances of more
fiscal stimulus in the United States.             
    They're now looking to Federal Reserve Chair Jerome Powell's
appearance on Capitol Hill this week to address lawmakers'
questions about the raft of emergency measures the central bank
has taken to cushion the blow to the economy from the pandemic.
            
    "Central banks would continue to have major concerns about
economic growth," Avtar Sandu, a senior commodities manager at
Phillip Futures, said in a note. 
    "Ultra-low yields and negative real interest rates will
remain as they are now for much longer, this should provide
support for the gold prices in the longer term."
    Lower interest rates decrease the opportunity cost of
holding non-yielding bullion. Gold, which has risen nearly 26%
this year, is also widely viewed as a hedge against inflation
and currency debasement.
    Elsewhere, silver        fell 3.7% to $23.83 per ounce,
platinum        was down 0.4% at $877.74 and palladium       
dipped 0.6% to $2,260.97.

 (Reporting by Eileen Soreng in Bengaluru, Editing by Sherry
Jacob-Phillips and Emelia Sithole-Matarise)
  
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