* Silver ETFs hit record high
* Platinum scales near three-month peak
* Euro zone PMI unexpectedly falls in July
* Markets eye ECB meeting on Thursday, U.S. Fed month-end
meeting
(Updates prices)
By K. Sathya Narayanan
July 24 (Reuters) - Gold gained on Wednesday en route to
snap a three-session losing streak on expectations the U.S.
Federal Reserve and other major central banks would adopt a
dovish approach to monetary policy, while silver soared to a
more than one-year high.
Spot gold XAU= was up about 0.5% at $1,423.30 an ounce as
of 1:41 p.m. EDT (1741 GMT), below last week's peak of
$1,452.60. U.S. gold futures GCv1 settled 0.1% higher at
$1,423.60.
"Much (of the gains in gold) have to do with expectations
related to a Fed rate cut. If you get a rate cut, the
opportunity cost of holding gold decreases and we will see more
inflows into gold," said Natixis analyst Bernard Dahdah.
Investors expect the U.S. central bank to cut its overnight
benchmark lending rate at its July 30-31 policy meeting.
Futures FEDWATCH remain 100% priced for a rate cut of 25
basis points from the Fed and imply an 18% chance of 50 basis
points. MKTS/GLOB
Bullion also largely ignored a robust dollar .DXY , which
held close to a seven-week peak against key rivals. USD/
Gold priced in euros XAUEUR=R rose close to a 6-1/2 year
high scaled last week, after weak euro zone data kindled
expectations for aggressive monetary policy easing by the
European Central Bank when it meets on Thursday.
The euro zone purchasing managers' index (PMI), considered a
good guide to economic health, dropped to 51.5 this month from
52.2 in June, missing the median expectation in a Reuters poll
for 52.1. Gold gained on safe-haven bets following the PMI number out
of Europe, David Meger, director of metals trading at High Ridge
Futures, said.
Apart from expectations for dovish central bank policy
globally, bullion is also being supported by U.S.-Iran tensions
and ongoing trade war, Meger added.
A U.S. Navy ship took defensive action against a second
Iranian drone in the Strait of Hormuz last week, but did not see
the drone go into the water, the U.S. military said on Tuesday.
Silver XAG= gained 1.2% to $16.60 per ounce. It touched
$16.64 earlier in the session, its highest in over an year.
"Silver is living up to its reputation of being volatile.
... Retail and institutional investors are looking into silver
ETFs, indicating it is in demand again," said Quantitative
Commodity Research analyst Peter Fertig.
Silver ETFs HLDTOTALL=XAG tracked by Reuters have risen to
record levels, at 666.2 million ounces. GOL/ETF
Platinum XPT= rose 2.6% to $876.39, having touched a near
three-month high of $876.99 earlier in the session, while
palladium XPD= edged up 0.5% to $1,535.13 per ounce.
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