PRECIOUS-Gold bounces 1% on dollar retreat, dovish Fed signals

* Silver on track for 2nd straight weekly gain
* Dollar heads for worst week in a month
* Spot gold may rise to $1,966 per ounce - technicals
* Interactive graphic tracking global spread of coronavirus:
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https://tmsnrt.rs/3aIRuz7 in an external browser

(Recasts, adds comment, updates prices)
By Brijesh Patel
Aug 28 (Reuters) - Gold rebounded nearly 1% on Friday as the
dollar retreated and investors latched onto dovish policy
signals from U.S. Federal Reserve Chairman Jerome Powell.
Spot gold XAU= was up 0.9% at $1,946.55 per ounce by 0650
GMT after declining 1.3% on Thursday. It has gained nearly 0.4%
so far in the week after two straight weeks of losses. U.S. gold
futures GCv1 rose 1.1% to $1,954.10.
Prices see-sawed between a 1% gain and a 2% decline on
Thursday in the run-up to, and following, Powell's speech.
"The announcement by Powell that the Fed will likely
tolerate some inflation above the 2% target is indicative that
monetary policy will remain dovish, which should provide support
for gold," said National Australia Bank economist John Sharma.
Gold benefits from lower interest rates, as they decrease
the opportunity cost of holding the non-yielding bullion and
weigh on the dollar.
The dollar index .DXY fell 0.4% against its rivals and was
on track for its worst week in a month, making gold cheaper for
investors holding other currencies. USD/
Rising coronavirus cases have cast a shadow on hopes of a
quick economic recovery and prompted central banks to reduce
interest rates and loosen their monetary stance, helping gold
prices climb 28% so far this year. Data on Thursday showed the number of Americans filing new
claims for unemployment benefits hovered around 1 million last
week, suggesting the labour market recovery was stalling as the
pandemic drags on. Gold remains positioned to the upside as concerns over the
global economy remain, according to a note from Fitch Solutions.
Spot gold may rise to $1,966 per ounce, as its bounce from
Wednesday's low of $1,902.22 seems to be extending, said Reuters
technical analyst Wang Tao. TECH/C
Silver XAG= gained 1.3% to $27.40 per ounce and was on
track for a second consecutive weekly rise, up 2.3%.
Platinum XPT= rose 0.4% to $932.58, while palladium XPD=
climbed 1.1% to $2,184.21.

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