PRECIOUS-Gold prices slide 1% as Turkey upheaval buoys U.S. dollar

(Updates prices)
* Gold may retest a support at $1,716/oz - analyst
* Dollar firms near over one-week high
* Turkish lira at near all-time low

By Asha Sistla
March 22 (Reuters) - Gold prices fell 1% on Monday as
investors opted for alternative safe-haven assets such as the
U.S. dollar and bonds after Turkey's abrupt decision to replace
its central bank head with a critic of high interest rates
sparked financial uncertainty.
Spot gold XAU= slipped 0.8% to $1,730.45 per ounce by 0853
GMT, having dipped as much as 1% earlier in the session. U.S.
gold futures GCv1 were down 0.7% at $1,729.60 per ounce.
"This morning when the Turkish Lira fell out of bid, we
might have seen gold benefiting with the dollar and Japanese yen
but that's clearly not the case," said Michael McCarthy, chief
market strategist at CMC Markets.
"The stronger dollar seems to be the major driver for gold
market at the moment with the currency moves ... It appears that
U.S. dollar and yen remain the favourite choices."
Turkey President Tayyip Erdogan replaced a hawkish central
bank chief with an opponent of tight monetary policy on
Saturday, in a shock move that raised concerns about the impact
on other financial markets and supported the dollar as a
safe-haven currency. USD/
Gold, which is priced in dollar, also lost safe-haven flows
to the yen and bonds. US/ MKTS/GLOB
The metal may retest a support at $1,716 per ounce, a break
below could cause a fall into the range of $1,669 to $1,691,
according to Reuters technical analyst Wang Tao.
Meanwhile, the U.S. Federal Reserve said on Friday it would
not extend a temporary pandemic regulatory break on capital
requirements due to expire this month. "The commercial banks will have less tendency to hold or
purchase more of U.S. Treasuries so less demand for Treasuries
will likely lead to even higher yields on the longer-term
curve...that will likely weigh on gold prices even more," said
DailyFX strategist Margaret Yang.
Elsewhere, palladium XPD= dipped 2.8% to $2,565.74, silver
XAG= fell 3% to $25.46 and platinum XPT= slipped 2.3% to
$1,168.77.