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Gold soars to record high as virus fears lift safe-haven demand

Credit: REUTERS/AHMED YOSRI

Gold prices surged to an all-time high on Monday as fears over an economic fallout from rising COVID-19 cases boosted demand for the safe-haven metal, although gains were capped by an uptick in the U.S. dollar.

* Gold up 30% so far this year

* Specs cut gold bullish positions in week ended July 28 - CFTC

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Adds comments, details, updates prices)

By Brijesh Patel

Aug 3 (Reuters) - Gold prices surged to an all-time high on Monday as fears over an economic fallout from rising COVID-19 cases boosted demand for the safe-haven metal, although gains were capped by an uptick in the U.S. dollar.

Spot gold was steady at $1,973.94 per ounce by 0254 GMT, after hitting a record high of $1,984.66 in early Asian trade.

U.S. gold futures rose 0.3% to $1,992.30.

"The sentiment across markets is deteriorating. First of all, rising infection rates are a real concern for the globe and a real support for gold prices. Given that, it is also driving U.S. dollar higher," said Michael McCarthy, chief strategist at CMC Markets.

Coronavirus cases continued to surge in the United States and stood at over 17.96 million globally.

Rising COVID-19 cases and simmering U.S.-China tensions have dented hopes for a swift economic recovery, driving inflows into safe-haven assets such as gold, which climbed 30% so far this year.

"Gold also saw safe-haven demand as the federal unemployment bonus expired on Friday, which would affect U.S. consumer income and spending and the U.S. Central Bank would thus remain dovish," Phillip Futures analysts said in a note.

U.S. lawmakers struggled to hammer out a new stimulus plan. White House Chief of Staff Mark Meadows said on Sunday he was not optimistic on near-term deal for coronavirus relief bill.

Limiting gold's advance, the dollar index rose 0.2% , having touched its lowest level since May 2018 in the last session. A weaker dollar, also considered a rival safe haven, makes gold cheaper for holders of others currencies. [USD/]

China's factory activity expanded at the fastest pace in nearly a decade in July, a survey showed.

Speculators reduced their bullish positions in COMEX gold and silver contracts in the week to July 28.

Elsewhere, silver eased 0.2% to $24.32 per ounce, platinum fell 0.9% to $899.04 and palladium dropped 1.1% to $2,068.29. (Reporting by Brijesh Patel in Bengaluru, Editing by Sherry Jacob-Phillips) ((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848 5832, Outside U.S. +91 8067493865; Reuters Messaging: Brijesh.Patel1.thomsonreuters.com@reuters.net)) Keywords: GLOBAL PRECIOUS/ (UPDATE 1)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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