PRECIOUS-Gold slides, but set for sixth straight quarterly gain

(Updates prices)
* Palladium set for first monthly decline in eight
* Palladium eyes best quarter since 2010
* Platinum set for worst quarter since 2008
* Silver heads for worst quarter since June 2013

By Sumita Layek
March 31 (Reuters) - Gold prices dipped over 2% to their
lowest level in a week on Tuesday as the dollar firmed, but the
metal was on track for a sixth straight quarterly rise on
concerns about the global economic damage caused by the
coronavirus pandemic.
Spot gold XAU= fell 2.1% to $1,587.70 per ounce at 1:33 pm
EDT (1733 GMT). U.S. gold futures GCcv1 settled 2.8% lower at
$1,596.60.
"The mood across markets seems to be improving as investors
take comfort from the positive economic data from China.
However, a sense of caution still lingers in the air which is
stimulating appetite for the dollar," said FXTM analyst Lukman
Otunuga.
The dollar .DXY climbed against major rivals, making gold
more expensive for holders of other currencies. USD/
Investors cheered as strong Chinese factory data held out
hope for an economic revival even as much of the rest of the
world locked down to fight the virus outbreak. For the quarter, gold has gained 4.6% on the back of
U.S.-Iran tensions in January and then the global pandemic.
"Global sentiment remains shaky despite central banks and
governments standing together in the fight against COVID-19,"
Otunuga said, adding "fears revolving around a global recession
should send investors rushing towards gold, especially if cracks
start showing in the largest economy in the world."
Several policy measures have been implemented to combat the
economic toll from the coronavirus, which has infected nearly
800,000 people worldwide and killed almost 39,000 people.
Russia's central bank announced it would suspend buying gold
starting April 1. Platinum XPT= fell 0.4% to $720.25, and was on track to
post its biggest quarterly decline since September 2008.
"Platinum demand from the automotive industry has been
largely paralysed by the corona crisis," Commerzbank analysts
said in a note.
"The production outages in South Africa will be unable to
offset the negative effects on demand, assuming that production
– as announced so far – remains restricted for only three
weeks."
The world's largest platinum producers Anglo American
Platinum, Sibanye-Stillwater and Impala Platinum have declared
force majeure on contracts after a three-week national lockdown
in South Africa forced operations to close. Palladium XPD= rose 1.1% to $2,353.18 an ounce. The
auto-catalyst metal was headed for its biggest quarterly gain
since 2010 but its first monthly decline in eight.
Silver XAG= lost 1.1% to $13.96, and was set to post its
biggest quarterly decline since June 2013 and worst month since
September 2011.