June 30, 2020 / 10:46 AM / 4 days ago

PRECIOUS-Gold eyes best quarter in four years as virus fears persist

    * Gold on track for third straight monthly gain
    * U.S dollar holds near 1-month high
    * Fed Chair says U.S. economic outlook "extraordinarily
uncertain"

 (Recasts with updated prices, adds comments)
    By Nakul Iyer
    June 30 (Reuters) - Gold prices eased on Tuesday pressured
by a strong U.S. dollar, but bullion was still set for its
biggest quarterly gain in more than four years as a spike in
coronavirus cases cast doubt on a swift global economic
recovery.         
    Spot gold        edged 0.2% lower to $1,767.96 per ounce by
1239 GMT. U.S. gold futures        were little changed at
$1,780.20 per ounce.
   "Whenever risk aversion kicks in, the dollar comes back in
favour and I think that's acting as a bit of weight around the
neck of gold," said OANDA analyst Craig Erlam.
    Against a basket of currencies, the dollar index was up 0.2%
having hit a near one-month high earlier in the day.        
    But bullion was on track for a third straight monthly rise
and a quarterly gain of more than 12%. 
    The rise in coronavirus cases in the United States along
with the ongoing U.S.-China conflict are "all really pointing
towards safe haven gold buying," said Afshin Nabavi, senior vice
president at precious metals trader MKS SA.
   U.S. states have reversed re-openings and closed businesses
to combat a spike in cases, while infections in countries like
India and Brazil continued to rise.                          
   Escalating tensions with the U.S. and the European Union,
China's parliament passed landmark national security legislation
for Hong Kong on Tuesday.                          
   Casting further doubts over an economic recovery, U.S.
Federal Reserve Chair Jerome Powell on Monday said the outlook
for the world's biggest economy is "extraordinarily uncertain".
             
    On the flip side, demand in the physical bullion market,
especially in top consumer China, remained weak, Commerzbank
said.         
     China's net gold imports via Hong Kong in May fell below
its exports for a second straight month, as domestic supply
remained abundant amid a bleak demand outlook, data showed on
Monday.             
    Elsewhere, platinum         steadied at $804.93 per ounce,
while palladium        fell 0.3% to $1,898.09 per ounce. Silver
       was little changed at $17.85 per ounce.

 (Reporting by Nakul Iyer in Bengaluru, editing by Louise
Heavens and Kirsten Donovan)
  
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