PRECIOUS-Gold weakens on firmer dollar and potential coronavirus drug

* Dollar index firms after strong U.S. data
* European shares post biggest gains in nearly a month
* Trial shows generic steroid reduces COVID-19 death rates

(Updates prices)
By Eileen Soreng
June 17 (Reuters) - Gold prices fell on Wednesday, pressured
by a stronger dollar and as optimism over a potential COVID-19
drug and economic recovery dented demand for bullion and
supported riskier assets.
Spot gold XAU= was down 0.5% at $1,718.92 an ounce by
1238 GMT and U.S. gold futures GCcv1 fell 0.6% to $1,726.00.
Hopes for a COVID-19 treatment and the dollar's gains after
strong U.S. retail sales data and a rise in manufacturing output
prompted profit-taking in the gold market, said Jigar Trivedi,
commodities analyst at Mumbai broker Anand Rathi Shares.
The record increase in May U.S. retail sales reported on
Tuesday supported views the U.S. recession might be drawing to
an end, while upbeat trial results of a steroid treatment for
COVID-19 patients helped European equities add to their best
gains in almost a month. MKTS/GLOB
Against a basket of currencies, the dollar index .DXY was
up 0.2%. USD/
However, the market is more long than short overall, so
investors are taking advantage of any rallies, trading in a
range of $1,730-$1,735 on the upside and $1,710-$1,715 on the
downside, said Afshin Nabavi, senior vice president at precious
metals trader MKS SA.
Investors were also watching for developments in Beijing as
it cancelled scores of domestic flights on Wednesday, ramping up
attempts to contain a renewed outbreak of the coronavirus.
"If governments confirm a second wave of coronavirus, then
$1,740 is very likely (for gold)," Anand Rathi's Trivedi said.
Elsewhere, palladium XPD= fell 0.2% to $1,927.67 an ounce
while platinum XPT= eased by 0.1% to $819.49 and silver XAG=
gained 0.4% to $17.47.