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PRECIOUS-Gold touches six-week low as firm dollar dims appeal

    * Silver falls as much as 5.6%
    * Dollar holds strong gains against European currencies
    * Interactive graphic tracking global spread of coronavirus:
here

 (Updates prices)
    By Eileen Soreng
    Sept 23 (Reuters) - Gold prices hit a six-week low on
Wednesday as the dollar strengthened on concerns about rising
coronavirus cases in Europe, while doubts emerged over further
stimulus from the U.S. Federal Reserve.
    Spot gold        fell 1.2% to $1,877.52 per ounce by 801
GMT. Earlier in the session, bullion hit its lowest since Aug.
12 of $1,873.70. 
    U.S. gold futures        were down 1.4% at $1,882.50, while
the dollar index        hit an eight-week high.       
                         
    A firmer dollar makes bullion more expensive for holders of
other currencies. 
    "We are seeing a risk-off environment taking hold, which
means that the dollar continues strengthening and there is a lot
of pressure on gold prices in the near-term," said Howie Lee,
economist at OCBC Bank.
    Also weighing on sentiment were mixed signals from Chicago
Federal Reserve President Charles Evans, who on Tuesday said the
U.S. economy risks a longer, slower recovery and "recessionary
dynamics" if Congress fails to pass an additional fiscal
stimulus package.             
    It is possible for the Fed to raise interest rates before
inflation starts to average 2%, Evans added.
    Meanwhile, U.S. economic policymakers opened the door to
further aid for small businesses hit by the coronavirus, but
provided no quick path.             
    "We are also seeing a slight pessimism about U.S. fiscal
stimulus and that has probably curbed inflation expectations
just a little bit," said IG Markets analyst Kyle Rodda.
    Gold, viewed as a hedge against inflation and currency
debasement, has surged about 24% this year, mainly supported by
unprecedented stimulus measures by governments and central banks
worldwide to revive their coronavirus-battered economies.
    The market is still expecting changes in policy settings
that could lead to a stronger gold price overtime but that is a
longer-term view, he added.
    Elsewhere, silver        slipped 4.5% to $23.31 per ounce,
having hit a nearly two-month low of $23.04 earlier in the
session. 
    Platinum        and palladium        were down 1.1% at
$857.17 and $2,196.69, respectively.  

 (Reporting by Eileen Soreng in Bengaluru; Editing by Sherry
Jacob-Phillips and Devika Syamnath)
  
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