PRECIOUS-Gold dips 1% as dollar rises, but heads for quarterly gain

 (Updates throughout, adds comments) * Russia's central bank to stop buying gold starting April 1 * Platinum set for worst quarter since September 2008 * Silver heads for worst quarter since June 2013 By Brijesh Patel March 31 (Reuters) - Gold prices dropped 1% on Tuesday as
the dollar strengthened and strong Chinese economic data boosted
risk appetite, but bullion was on track for a sixth consecutive
quarterly rise amid fears over a global shutdown due to the
coronavirus. Spot gold was down 1% at $1,605.64 per ounce by 0930
GMT. It has gained nearly 6% for the quarter, and about 1.4%
this month. U.S. gold futures fell 1.2% to $1,599.00. "The combination of a strengthening dollar and better risk
appetite is weighing on gold," OANDA analyst Craig Erlam said. The dollar index rose 0.4% after posting a nearly 1%
gain overnight, as Japanese investors and companies rushed to
cover a greenback shortage before their fiscal year ends. Strong Chinese factory data lifted world stocks on Tuesday
but markets were heading their worst quarter since 2008 on
jitters about the economic hit from the coronavirus. More than 777,000 people have been infected by the new virus
across the world and 37,561 have died, according to a Reuters
tally. Central banks around the world have announced major fiscal
and monetary packages to try to limit the economic damage, as
governments have extended lockdowns to combat the virus' spread. "With central banks unleashing a tsunami of quantitative
easing (QE) at a time when fear is running rampant in markets
and (as) government debts are about to explode, it seems like
the perfect cocktail that could push gold back to record highs,"
said Ajay Kedia, director at Kedia Commodities in Mumbai. Meanwhile, Russia's central bank announced it would stop
buying gold starting April 1 and offered no explanation behind
the decision. "On the technical side, (gold) prices could jump higher
towards $1,675 if a solid daily close above $1,630 is achieved.
Alternatively, sustained weakness below may open the door back
towards $1,600," FXTM analysts said in a note. Among other precious metals, platinum dropped 0.3% to
$720.91 and was on track to post its biggest quarterly
percentage decline since 2008. The world's largest platinum producers Anglo American
Platinum , Sibanye-Stillwater and Impala
Platinum have declared force majeure on contracts after
a three-week national lockdown in South Africa forced operations
to close. Palladium slipped 0.9% to $2,306.10 an ounce, while
silver dropped 1% to $13.97, and was set to post its
worst quarter since 2013. (Reporting by Brijesh Patel in Bengaluru; Editing by Mark
Potter) 

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