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PRECIOUS-Gold gains on virus fears, strong dollar caps gains

Credit: REUTERS/HEINZ-PETER BADER

Gold rose on Monday, supported by worries over a spike in COVID-19 cases and uncertainty surrounding next month's U.S. presidential election, though a stronger dollar limited the metal's advance.

* Stocks dip on surging virus cases

* Platinum down more than 3%

* Interactive graphic tracking global spread of coronavirus: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/ (Updates throughout, adds comment)

By Brijesh Patel

Oct 26 (Reuters) - Gold rose on Monday, supported by worries over a spike in COVID-19 cases and uncertainty surrounding next month's U.S. presidential election, though a stronger dollar limited the metal's advance.

Spot gold was up 0.2% at $1,905.26 per ounce by 10:46 a.m. EST (1446 GMT), while U.S. gold futures were up 0.1% at $1,907.10.

"Gold has been trapped between $1,930 - $1,880. It is waiting to take cues from the election and there's this resurgence of the pandemic," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

"But the dollar index is up today, (and) has a strong inverse correlation to gold," he added.

A spike in new infections weighed on risk sentiment among investors as cases touched record levels in the United States. In Europe, Italy and Spain imposed new restrictions. [MKTS/GLOB]

U.S. House Speaker Nancy Pelosi on Sunday said the Trump administration was reviewing the latest plan for more COVID-19 relief, and she expected a response on Monday.

"Overall bullish sentiment remains strong and deep, with a view that more stimulus will be coming and that it is really only a matter of time," said Tai Wong, head of base and precious metals derivatives trading at BMO.

"As a result we continue to see demand for gold on dips."

Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement.

However, safe-haven gains for the U.S. dollar limited gold's appeal, as the dollar index rose 0.3% against its rivals, making gold more expensive for holders of other currencies. [USD/]

Elsewhere, silver slipped 0.6% to $24.44 per ounce, palladium fell 1.4% to $2,360.62 and platinum shed 3.2% to $872.71.

(Reporting by Brijesh Patel in Bengaluru; Editing by Jan Harvey) ((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 6)

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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