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Gold eases on firm dollar, but holds near $1,800 on virus fears

Kitco News

* SPDR Gold Trust holdings rise 0.3% on Monday
* U.S.-China tensions, mounting virus cases weigh on global stocks

July 14 (Reuters) - Gold inched down on Tuesday as the dollar held firm, but concerns over surging coronavirus cases globally and renewed US-China tensions underpinned bullion's safe haven appeal and kept it near $1,800 an ounce.

Spot gold eased 0.3% to $1,797.64 per ounce by 1009 GMT. U.S. gold futures fell 0.8% to $1,799.60.

"Gold has been the traditional safe-haven but the dollar has more been favoured on that side of late," OANDA analyst Craig Erlam said, although global economic stimulus continued to prop up gold, considered a hedge against inflation and currency debasement.

"Broadly speaking, gold is looking bullish medium term, but I won't be surprised to see a little bit of correction off of this $1,800 level," especially driven by profit-taking.

Weighing on global equities, many parts of Asia are finding cause to pause the reopening of their economies on a jump in virus cases, while global cases had crossed the 13 million threshold.

Apart from the pandemic, a growing rift between the U.S. and China over the South China Sea region also kept investors wary and drove them to safe havens, with Beijing announcing it will slap sanctions on Lockheed Martin for involvement in the latest U.S. arms sale to Chinese-claimed Taiwan.

However, some of those safe-haven flows went to the dollar, making gold more expensive for holders of other currencies.

Reflecting investor appetite for gold, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.3% to 1,203.97 tonnes on Monday.

On the technical front, a bullish target of $1,831 per ounce has been aborted for spot gold as it is about to break a support at $1,796, said Reuters technical analyst Wang Tao.

Elsewhere, palladium was steady at $1,980.48 per ounce and platinum dipped 0.3% to $825.79.

Silver dropped 0.7% to $18.95 per ounce, after hitting its highest since September 2019 on Monday.

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