PRECIOUS-Gold firms on weaker dollar as focus turns to Fed

* Specs cut bullish gold positions in week to Aug. 11 - CFTC
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(Adds comment, updates prices)
By Harshith Aranya
Aug 17 (Reuters) - Gold rose on Monday as the dollar eased,
recouping initial declines following a steep drop in the
previous week, with focus on the release of U.S. Federal Reserve
minutes later this week.
Spot gold XAU= rose 0.3% to $1,949.09 per ounce by 0636
GMT.
Gold fell 4.5% last week in its biggest decline since March
as investors reassessed positions after bullion retreated from a
record peak of $2,072.50 scaled on Aug. 7. U.S. gold futures
GCcv1 gained 0.5% at $1,958.90 per ounce.
Gold does not "seem ready to resume the selloff in earnest
as traders wait for FOMC meeting minutes and the fate of U.S.
fiscal stimulus negotiations," said DailyFx currency strategist
Ilya Spivak.
"Prices may need to reclaim a foothold above the $2,000/oz
figure to suggest near-term selling pressure has been
neutralized."
Making gold more attractive for holders of other currencies,
the dollar slipped as investors were relieved by a delay in the
review of a U.S.-China trade pact. .DXY USD/
While a rise in real U.S. bond yields and profit taking
"stifled gold's upward trajectory" somewhat, fundamentals look
sound, said National Australia Bank economist John Sharma. US/
The minutes from the Fed's last policy meeting are due on
Wednesday, with focus on any hints of a possible change to its
guidance at its next review in September. "The document might suggest the Fed is not in a hurry to
expand the monetary support toolkit for now," DailyFx's Spivak
added.
"The sense of urgency could be reduced further if Democrats
and Republicans manage to agree on another round of fiscal
support." Gold has risen 28.4% so far this year as unprecedented
global stimulus to ease the economic blow from the COVID-19
pandemic pushed investors to bullion as a hedge against
inflation and currency debasement. Silver XAG= rose 1.5% to $26.81 per ounce, platinum XPT=
rose 2.1% to $955.54 per ounce and palladium XPD= gained 2.6%
to $2,164.07 per ounce.