* Gold on track for worst day since June 2013
* Silver plunges 7.8%, biggest daily decline since mid-March
* U.S. PPI rebounded more than expected in July
* Interactive graphic tracking global spread of coronavirus:
open
https://tmsnrt.rs/3aIRuz7 in an external browser
(Updates prices, adds comment)
By Nakul Iyer
Aug 11 (Reuters) - Gold prices dived on Tuesday as the
dollar clung to recent gains, while expectations of a U.S.
stimulus deal boosted risk appetite and prompted investors to
take profits from bullion's run to a record high.
Spot gold XAU= plunged 4.2% to $1,941.71 per ounce by 1311
GMT, retreating from last week's record of $2,072.50. U.S. gold
futures GCcv1 dropped 3.5% to $1,969.20 per ounce.
"The retreat was inevitable," said StoneX analyst Rhona
O'Connell, adding that gold has been technically overbought for
a while.
That gold did not advance further despite rising
geopolitical tensions showed many supportive elements for gold
have already been priced in, she added.
Adding to gold's headwinds, global equities hit multi-month
highs on expectations U.S. Congress will agree a massive
stimulus deal while looming trade talks raised hopes of an
easing in tensions between the United States and China.
MKTS/GLOB .EU Also weighing on gold, U.S. producer prices rebounded more
than expected in July. The dollar, too, retained recent gains, making gold less
attractive for investors holding other currencies. .DXY USD/
There is a battle now, because from a technical perspective,
short-term traders are looking at which retracement levels can
come into play after the breakout to record levels, said Saxo
Bank analyst Ole Hansen.
Most analysts still expect a positive trajectory for gold,
with the metal having gained nearly 30% this year as
unprecedented money-printing by central banks and near-zero
interest rates pushed investors into bullion as a hedge against
possible currency debasement and inflation.
The recent "washout of speculative long positioning sets
gold up for a more balanced rally going forward", said Jeffrey
Halley, a senior market analyst at OANDA.
Among other precious metals, silver XAG= plunged 7.8% to
$26.88 per ounce, platinum XPT= dropped 4.8% to $939.19 per
ounce and palladium XPD= slid 5.4% to $2,099.47 per ounce.
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Gold's hasty retreat https://tmsnrt.rs/33PsAN8
Gold's correction overdue? https://tmsnrt.rs/33NwQgc
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