PRECIOUS-Gold falls 1% on strong dollar; eyes on ECB policy decision

* Dollar index up 0.6%
* ECB policy decision due on Thursday
* Interactive graphic tracking global spread of coronavirus:
open
https://tmsnrt.rs/3aIRuz7 in an external browser

(Updates prices)
By Diptendu Lahiri
Sept 8 (Reuters) - Gold prices fell 1% on Tuesday as a
strong dollar outweighed lingering economic concerns and
investors awaited policy cues from the European Central Bank.
Spot gold XAU= was down 0.5% at $1,918.79 per ounce by
1203 GMT, after falling as much as 1% to $1,907.61. U.S. gold
futures GCv1 fell 0.7% to $1,919.90 per ounce.
If the U.S. Federal Reserve does not announce any fresh
fiscal push while the ECB announces some stimulus package, "in
dollar terms, gold will face some headwinds," said OANDA analyst
Craig Erlam.
The dollar .DXY strengthened against its rivals, making
gold more expensive for holders of other currencies, amid bets
that policy signals from the ECB on Thursday could weigh on the
euro. USD/
Market players also awaited the policy meeting of the Bank
of Canada on Wednesday, while the U.S. Fed's next meeting is
scheduled for next week.
Global central banks have saturated markets with
extraordinary liquidity steps to offset the economic damage
inflicted by the coronavirus, sending gold 26% higher this year
as it is considered a shield against inflation and currency
debasement. "Inflation expectations have come down a bit and with that
real yields move higher, and that's also having a small negative
impact on gold," said Saxo Bank analyst Ole Hansen.
"So far, the selling we've seen is mostly light profit
taking, (and) the overriding gold supportive theme has not gone
away, that also means we don't expect a deep correction as
such."
Also on investors' radar, U.S. President Donald Trump on
Monday again raised the idea of decoupling the U.S. economy from
China. Elsewhere, silver XAG= fell nearly 2% to $26.47 per ounce
and platinum XPT= was down 1.1%, to $898.20, while palladium
XPD= dipped 0.5% to $2,285.29.

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