* Gold pulls back from record high of $1,980.57/oz
* Goldman Sachs raises 12-month gold price forecast to
$2,300
* Silver retreats after hitting over 7-year high of
$26.19/oz
* Dollar edges higher from 2-year low
(Adds comments, updates prices)
By Nakul Iyer and Swati Verma
July 28 (Reuters) - Gold gained on Tuesday as U.S. Federal
Reserve policymakers began a meeting that is expected to provide
more monetary stimulus to support the coronavirus-hit American
economy, though bullion pulled back from an all-time high
reached earlier.
As of 1:32 p.m EDT (1732 GMT), spot gold XAU= rose 0.3% to
$1,947.19 per ounce, while U.S. gold futures GCcv1 settled
0.7% higher at $1,944.60 per ounce.
Gold surged to a record high of $1,980.57 earlier, but
prices retreated as much as 3.7% later in the session as
investors booked profits and the dollar bounced back.
"When you get a strong momentum coming in, you get a lot of
speculators who are looking to turn a quick profit," said
Michael Matousek, head trader at U.S. Global Investors.
"Nothing has changed fundamentally at all, the deficits and
lower interest rates stoking inflation are still going to be
here, so there is no reason not to own gold, really."
Investors now await the Wednesday outcome of the Fed's
two-day policy meeting after the U.S. central bank announced
extension of several of its lending facilities through the
year-end.
Stocks fell as a $1 trillion aid package announced by the
U.S. Senate Republicans faced opposition from both Democrats and
Republicans. MKTS/GLOB
The ambiguity of the trillion dollar legislation is
certainly a positive for gold because it suggests that the Fed
will have to take more accommodative measures to support the
economy, said Bart Melek, head of commodity strategies at TD
Securities.
Gold prices are expected to rise to $2,300 per troy ounce
over the next 12 months, Goldman Sachs said, adding that
concerns around the longevity of the U.S. dollar as a reserve
currency have started to emerge. The dollar index bounced off a two-year low on Tuesday but
looked primed for further weakness amid surging U.S. coronavirus
cases. USD/
Silver XAG= retreated after rising 6.4% to its highest
since April 2013 at $26.19 per ounce. It was last down 2.2% at
$24.07 per ounce.
Platinum XPT= fell 0.2% to $943.80 and palladium XPD=
dropped 1.2% to $2,283.27 per ounce.
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Sharp retreat in gold and silver https://tmsnrt.rs/2X4ODv3
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