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PRECIOUS-Gold retreats 1% as dollar regains upper hand

      Dollar heads towards 20-year high

      After $1,620, $1,580 area will be next support for gold-

 (Recasts, adds comments, updates prices)
    By Eileen Soreng
       Sept 29 (Reuters) - Gold prices slipped 1% on Thursday,
relinquishing some gains from the previous session, as the
dollar resumed its rally fuelled by bets for more U.S. interest
rate hikes.
    Spot gold        fell 1.1% to $1,641.10 per ounce, as of
0732 GMT, after rising about 2% in its biggest daily gain since
March on Wednesday.
    U.S. gold futures        was down 1% at $1,652.50.
    "The strong U.S. dollar is putting pressure on gold and
commodity prices... The market is seeking certainty and
stability that appears to be in short supply," said Michael
Langford, director at corporate advisory firm AirGuide.
    Denting the greenback-priced bullion, the dollar index
       raced towards its recent 20-year high, buoyed by renewed
pressure on the pound and safe-haven buying due to worries about
a global slowdown.
    Traditionally seen as a hedge against inflation and economic
turmoil, gold prices have fallen 20% since scaling above the key
$2,000 per-ounce level in March, as rapid U.S. rate hikes
diminish the non-yielding metal's appeal.
    Benchmark 10-year yields             also charged towards a
more than a decade high.
    Gold was also bound for a sixth consecutive monthly drop.
    "Investment demand has been falling... SPDR Gold ETF began
the year around 975 tonnes and is currently at 940 tonnes," said
Jigar Trivedi, senior analyst currency and commodity analyst at
Mumbai-based Reliance Securities.
    On the technical front "around $1,620 there is good support.
In case it breaks next week, $1,580 area will be the next
support," Trivedi added.
    Atlanta Fed President Raphael Bostic said on Wednesday his
baseline outlook is for the U.S. central bank to hike rates by
three-quarters of a percentage point at its November policy
meeting and by half a percentage point in December.
    Spot silver        shed 1.8% to $18.55 per ounce, platinum
       dropped 2% to $845.85, while palladium        edged 0.2%
higher to $2,159.35.
 (Reporting by Eileen Soreng and Ashitha Shivaprasad in
Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)

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