(Updates prices)
* Spread between LBMA and COMEX prices narrows
* SPDR gold holdings jump to 7-year high
* Palladium hovers around more than 1-month low
* For an interactive graphic tracking the global spread,
open https://tmsnrt.rs/3aIRuz7
in an external browser
By Eileen Soreng
May 6 (Reuters) - Gold fell more than 1% on Wednesday,
pressured by a stronger dollar and expectations that gold
supplies will grow as bullion refineries resume operations, and
on gradual improvement in investor risk appetite as countries
have begun to ease coronavirus restrictions.
Spot gold XAU= dipped 1.1% to $1,686.50 per ounce by 1:44
p.m. EDT (1744 GMT).
U.S. gold futures GCcv1 settled 1.3% lower at $1,688.50,
narrowing their lead over the London spot prices to just around
$2 after two of the world's biggest gold refiners said they are
restoring almost all operations.
This ended six weeks of closures that disrupted global gold
supply and helped drive prices in New York and London further
apart than they have been in decades. Gold has
risen about 11% so far this year as the global economy has
slumped during the pandemic.
"It's probably a combination of more supply coming in to the
COMEX, and probably a little bit less interest as risk appetite
is growing and the U.S. dollar rallies," said Bart Melek, head
of commodity strategies at TD Securities.
Many countries like Italy, Germany and the United States are
tentatively easing lockdowns. MKTS/GLOB
The S&P 500 .SPX and Nasdaq .IXIC rose on hopes of a
pickup in business activity as states eased coronavirus-induced
curbs, with investors also looking past a stunning 20
million-worker plunge in U.S. private payrolls last month.
.N Further denting gold's appeal, the dollar index .DXY rose
0.3% to a more than one-week high. USD/
"You can't count out gold as dollar strength is not due to
higher interest rates but weaker global currency outlook,"
George Gero, managing director at RBC Wealth Management, said in
a note.
The outbreak, which has infected more than 3.68 million
people globally, has battered global growth and prompted nations
to unleash massive fiscal and monetary measures to limit
economic damage. Gold tends to benefit from widespread stimulus from central
banks because it is considered a hedge against inflation and
currency debasement.
Investors also kept a close eye on brewing U.S.-China
tensions over the origin of the coronavirus. Reflecting investor interest, holdings in the world's
largest gold-backed exchange-traded fund, SPDR Gold Trust GLD ,
rose to their highest level since April 2013. GOL/ETF
Elsewhere, silver XAG= fell 0.7% to $14.91 per ounce and
platinum XPT= dropped 1.8% to $751.05.
Palladium XPD= eased 0.3% to $1,795.00 per ounce after
hitting its lowest level in over a month on Tuesday.
Prices of platinum group metals could fall 15-20% in the
near term on a rising surplus, Citigroup said in a note.
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SPDR gold holding jump to 7-year high IMAGE https://tmsnrt.rs/2SGb9IG
Spread between U.S. gold futures and London spot narrows IMAGE
https://tmsnrt.rs/2SH3CcB
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