PRECIOUS-Gold tumbles 3% as Fed minutes lift dollar, Treasury yields

* Dollar jumps 0.8%, snapping five sessions of losses
* Fed policymakers see more easing ahead -minutes
* Smaller coronavirus aid bill reachable -Trump official
* Interactive graphic tracking global spread of coronavirus:
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(New throughout, updates prices and adds comments)
By Sumita Layek
Aug 19 (Reuters) - Gold slumped more than 3% on Wednesday,
as the dollar jumped and Treasury yields gained after the U.S.
Federal Reserve's July meeting minutes showed policymakers
expressed little support to cap bond yields.
Spot gold XAU= fell 3.4% to $1,932.09 per ounce by 4:21
p.m. EDT (2021 GMT), while U.S. gold futures GCv1 settled
2.1% lower at $1,970.30.
"One of the concerns was that the Fed was possibly going to
adopt yield curve control, that would've been a strong catalyst
for continued dollar weakness, but they said they are not
considering it right now," said Edward Moya, senior market
analyst at broker OANDA.
"That would have been the most dovish outcome from the
minutes, but we didn't get that," Moya added.
Capping bond yields could diminish the attractiveness of
U.S. Treasury debt and pressure the U.S. currency, boosting the
non-yielding metal's allure.
U.S. Treasury yields rose and the dollar .DXY jumped 0.8%
after the minutes, ending a five-session slide to over a
two-year low. USD/ US/
The Fed reiterated the economic downturn triggered by the
coronavirus pandemic faces a highly uncertain path and
additional fiscal stimulus would needed to support the economy.
"The expectation that the Fed would do something more has
been the catalyst for the selling at this point," said Jeffrey
Sica, founder of Circle Squared Alternative Investments.
"They didn't give any indication that they are going to
create the amount of liquidity the gold investors were hoping
for to get the price firmly above $2,000," Sica added.
Widespread stimulus measures and a low interest rate
environment pushed gold prices to an all-time peak on Aug. 7,
but bullion has pared gains since then.
Gold was also pressured on Wednesday as a senior Trump
administration official said a smaller coronavirus relief bill
worth around $500 billion could be reached, as opposed to one
between $1 trillion and $3 trillion that had been previously
expected. Elsewhere, silver XAG= fell 3.7% to $26.61 per ounce.
Platinum XPT= dropped 2.9% to $928.53 and palladium XPD=
fell 1.5% to $2,154.55.