PRECIOUS-Gold drops as dollar rises, investors book profits

(Updates prices)
* Gold has risen more than $130 so far this month
* Global economy may shrink by 3% in 2020 - IMF
* Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7
in an external browser

By Brijesh Patel
April 15 (Reuters) - Gold slipped on Wednesday as the dollar
strengthened and some investors locked in profits from a surge
in prices this month, but mounting fears of a global recession
kept bullion firm above $1,700 per ounce.
Spot gold XAU= was down 0.7% at $1,714.88 per ounce, as of
1254 GMT. In the previous session, it jumped as much as 1.9% to
its highest level since November 2012 at $1,746.50.
U.S. gold futures GCcv1 dropped 1.4% to $1,744.10.
"It's a small correction. We're seeing some profit-taking,
considering the move we have seen in recent weeks. Also a
stronger dollar is not helping gold prices," UBS analyst
Giovanni Staunovo said.
"However, we still believe there is some upside from here.
So we now target the move up to $1,800 an ounce and essentially
believe aggressive monetary stimulus by central banks, such as
the U.S. Federal Reserve, will keep real assets like gold
supported."
Gold tends to benefit from widespread stimulus measures from
central banks, as it is often seen as a hedge against inflation
and currency debasement. Lower interest rates also reduce the
opportunity cost of holding non-yielding bullion.
The Fed last week announced a broad, $2.3 trillion effort to
bolster local governments and small and mid-sized businesses hit
by coronavirus outbreak. Gold prices have risen nearly 9%, or more than $130, so far
this month after many countries have extended lockdowns and
central banks around the world have rolled out a flood of fiscal
and monetary measures to limit the pandemic's financial toll.
China moved again to cushion its economy, cutting a key
medium-term interest rate to record lows and paving the way for
a similar reduction in benchmark loan rates. Limiting gold's appeal, the dollar index .DXY rose 0.6%
against a basket of major currencies. USD/
Share markets dipped into the red after the International
Monetary Fund said the global economy was expected to shrink by
3% in 2020 because of the pandemic, in the worst downturn since
the Great Depression of the 1930s. Palladium XPD= was down 1.5% at $2,184.48 per ounce.
"We continue to expect the palladium market to be
undersupplied this year and next year, despite latest industry
expectations for auto sales to plummet by at least 14%,"
Standard Chartered Bank analysts said in a note, adding the
auto-catalyst metal would be supported above $2,000 for now.
Silver XAG= dipped 2.4% to $15.43 and platinum XPT= fell
1.3% to $764.58.