PRECIOUS-Gold falls as dollar holds firm on new virus strain fears

(Updates prices)
* U.S. Congress approves $892 coronavirus stimulus package
* Dollar gains on new COVID-19 strain
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

By Asha Sistla
Dec 22 (Reuters) - Gold prices fell on Tuesday as the dollar
strengthened on growing worries about a mutant coronavirus
strain in the UK, while market response to a long-awaited U.S.
economic stimulus package limited bullion's losses.
Spot gold XAU edged 0.2% lower to $1,872.47 per ounce by
1215 GMT, U.S. gold futures GCv1 fell 0.3% to $1,877.30.
"The weakness we're seeing now is driven by end of year
profit taking, but it's also driven by the fact that we've seen
the dollar strengthen as risk markets become more risk averse
with the latest COVID news from the UK," said Saxo Bank analyst
Ole Hansen.
The dollar index .DXY firmed, while holding close to a
more than one-week high as Britain remained stuck in COVID-19
isolation due to a highly infectious new coronavirus strain.
USD/
Bullion hit a six-week high of $1,906.46 on Monday, mainly
supported as U.S. Congress approved a $892 billion coronavirus
aid package to support the pandemic-ravaged economy, with
President Donald Trump expected to sign it into law soon.
Gold has climbed 23% this year, helped by a raft of pandemic
stimulus measures that stoked fears of inflation. The precious
metal is often used as a hedge against inflation.
On the technical front, gold may revisit its Nov. 30 low of
$1,764.29 per ounce next quarter, according to Reuters analyst
Wang Tao.
In other metals, silver XAG= fell 1.1% to $25.87 an ounce,
but hovered closed to a more than three-month peak hit in the
previous session.
"(Silver) is tracking gold, it's also had the extra
dimension of being supported by the rally we've seen in the
industrial metals. It's got a green transformation steam
attached to it, given the expectations for increased demand for
solar panels next year," added Saxo Bank's Hansen.
Platinum XPT= was up 0.5% at $1,014.33 and palladium
XPD= rose 0.5% to $2,320.06.