Gold rises as dollar tumbles, slowing U.S. growth boosts appeal
(Recasts lede, updates prices)
* USD slips 0.6% against rivals
* U.S. GDP slows to 2% in Q3
* Palladium, platinum rise more than 1% each
By Amy Caren Daniel
Oct 28 (Reuters) - Gold prices rose on Thursday, as demand for the safe-haven asset was lifted by a softer dollar and data showing the U.S. economy grew at its slowest pace in more than a year.
Spot gold XAU= rose 0.3% to $1,801.43 per ounce by 2:05 pm ET (1805 GMT). U.S. gold futures GCv1 settled up 0.2% at $1,802.6.
"Economic growth slowed in the U.S. and that would support the gold market in the perspective that the Federal Reserve would be less likely to either taper asset purchases at a quicker pace or the outlook for higher interest rates would be curtailed," said David Meger, director of metals trading at High Ridge Futures.
U.S. gross domestic product increased at a 2.0% annualized rate last quarter, as a resurgence in COVID-19 cases further stretched global supply chains, leading to shortages of goods like automobiles that slammed the brakes on consumer spending.
The U.S. dollar fell 0.6% against a basket of currencies, a one-month low, making gold cheaper to overseas buyers.
"Gold being considered one of the quintessential hedges against inflationary pressures is an underlying supportive factor for the bullion market moving forward, and we see both gold and silver prices moving higher in the weeks ahead," Meger said.
Spot silver XAG= rose 0.1% to $24.07 per ounce.
The European Central Bank left its policy unchanged, as widely expected, on Thursday.
Markets are now focused on the U.S. Federal Reserve's meeting on Nov. 2-3, which would be more crucial for gold after chief Jerome Powell's recent comments on tapering asset purchases.
"Tapering should already be well and truly discounted, although there is bound to be a short-lived knee-jerk reaction to the Fed's statement next Wednesday – there always is," StoneX analyst Rhona O'Connell said.
Platinum XPT= rose 1% to $1,020.97 per ounce. Palladium XPD= jumped 1.5% to $1,992.81 per ounce.
Reporting by Amy Caren Daniel in Bengaluru; Editing by Krishna Chandra Eluri and Will Dunham
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