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Gold Dips In Volatile Trade As Rush For Cash Overshadows Stimulus Efforts

Spot gold was trading down 0.4% at $1,480.00 per ounce by 0753 GMT. The metal fell about 3% on Wednesday along with other precious metals.

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Gold fell in volatile trade on Thursday as fears of a worsening epidemic and its fallout on the global economy sent investors scrambling for cash.

Spot gold was trading down 0.4% at $1,480.00 per ounce by 0753 GMT. The metal fell about 3% on Wednesday along with other precious metals.

U.S. gold futures rose 0.3% to $1,481.70.

"When panic strikes people liquidate everything that isn't perfectly liquid ... when sentiment steadies a bit the whole thing goes the other way," said DailyFx currency strategist Ilya Spivak.

"Yesterday was a big 'liquidation on' day, and now we're seeing a 'liquidation off' correction."

The dollar was at a three-year high hit in the previous session, while bonds plunged and stocks struggled to find their footing as the fears of the pandemic continue to eclipse stimulus measures launched by governments and central banks around the world.

The ECB launched a 750 billion euro ($818 billion) emergency bond purchase programme on Wednesday to push down borrowing costs in a bloc struggling with the economic fallout of the virus.

The Japanese government is expected to lay out economic packages, while Germany's Chancellor urged its citizens to adhere to rules aimed at reducing social contact.

The U.S. Senate overwhelmingly passed legislation providing billions of dollars to limit the damage from the outbreak through free testing, paid sick leave and expanded safety-net spending.

"Bullion owners in any form, physical, paper or scrap, will probably continue to liquidate in order to boost capital levels, the more protracted the COVID-19 global lockdown extends," Stephen Innes, chief market strategist at AxiCorp, said in a note.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.66% to 923.69 tonnes on Wednesday.

Palladium was little changed at $1,587.32 per ounce after sliding more than 5% earlier, while platinum fell for the seventh-straight session and was last down 2.2% to $610.52.

Silver hovered close to an eleven-year low hit in the previous session, falling 0.4% to $11.93 an ounce.

(Reuters)


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