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PRECIOUS-Gold retreats more than 1% as dollar halts slide
Published at 30/07/2020 at 13:22

* Gold up more than 28% so far this year

* Fed pledges to keep interest rates near zero

* Spot gold may test support at $1,943/oz - technicals

* Interactive graphic tracking global spread of coronavirus: open in an external browser

(Adds comment, updates prices)

By Eileen Soreng

July 30 (Reuters) - Gold fell on Thursday as the dollar stalled its slide, with analysts saying bullion may face more resistance in its bid to breach the $2,000 level.

Spot gold was 1.0% lower at $1,951.42 per ounce by 1220 GMT, having earlier fallen as much as 1.3% to $1,944.76.

U.S. gold futures eased 0.4% to $1,946.50.

The dollar found some support after the U.S. Federal Reserve in a policy update offered no real clues about its next moves beyond a reiteration of its easy monetary stance.

Dollar bears had speculated the Fed might loosen its approach to inflation.

"Post-FOMC we are getting a little bit of a better bid on the dollar, although its still pretty much on its knees, and because of that we've seen a bit of correction in gold," said Afshin Nabavi, senior vice president at precious metals trader MKS SA.

Gold jumped to near a record high on Wednesday after the Fed pledged to keep interest rates near zero. But initial gains in equities led by Wall Street overnight, and now a bounce in rival safe-haven the dollar - making gold less attractive to holders of other currencies - cut short the climb.

But the non-yielding metal, which benefits from low interest rates and is considered insurance against currency debasement and high inflation, is still up over 28% this year, supported by strong investment demand from Europe and North America, which has offset weak physical consumption in top Asian hubs.

"The macro environment is still quite friendly for gold - there's plenty of geopolitical risks and the monetary accommodation is still very significant across many central banks," Bank of China International analyst Xiao Fu said.

"It's just that $2,000 is very strong psychological resistance level and people are a bit nervous about gold's valuation."

Prices may test support at $1,943 per ounce, said Reuters technical analyst Wang Tao.

Other metals were also lower, with silver shedding 4.3% to stand at $23.37 per ounce, platinum down 1.7% to $908.87 and palladium off 4.4% at $2,063.41.

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(Reporting by Eileen Soreng in Bengaluru Editing by David Holmes, Kirsten Donovan)

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