PRECIOUS-Gold rises to two-week high as dollar dives

(Updates prices)
* Dollar hits more than two-year low
* Silver rises to three-week high
* Interactive graphic tracking global spread of coronavirus:
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https://tmsnrt.rs/3aIRuz7 in an external browser

By Diptendu Lahiri
Sept 1 (Reuters) - Gold prices jumped more than 1% on
Tuesday to a near two-week high, following the steepest fall in
the dollar in more than two years as investors bet on U.S.
interest rates staying lower for longer.
Spot gold XAU= was up 1% to $1,989.78 per ounce by 1203
GMT, having earlier hit its highest since Aug. 19 at $1,991.91.
U.S. gold futures GCcv1 also rose nearly 1% to $1,997.30.
"The two drivers for gold are the weaker dollar and lower
yields and that will keep the metal moving between the range of
$1,800 and $2,100 until the U.S. presidential elections in
November," said Robin Bhar, an independent analyst.
"However, at the end of every month we might see some
corrections as a result of speculators selling their positions."
The dollar index .DXY dropped to a more than two-year low,
making gold cheaper for holders of other currencies. USD/
The U.S. Federal Reserve's new monetary policy plan, which
may lead to inflation rising marginally and long-term interest
rates staying lower, also weighed on U.S. Treasury yields.
Low interest rates minimise the opportunity cost of owning
non-yielding bullion, which is often used as a buffer against
inflation and currency depreciation.
Gold has gained about 31% this year, also supported by
economic uncertainty stemming from the coronavirus pandemic.
While waning consumer demand remains a headwind, "strong
investor demand is likely to continue to provide support for
gold," Heraeus Precious Metals said in a note.
"In the near term, gold could move sideways as it
consolidates following its rapid rally to record highs in early
August."
Elsewhere, silver XAG= was up 2% to $28.79 per ounce,
after hitting its highest since Aug. 11.
Platinum XPT= rose 2.5% to $952.86 and palladium XPD=
climbed 1.7 % to $2,280.47.