KONTAN.CO.ID - JAKARTA. Gold fell as much as 1.8% on Tuesday from an all-time peak as the dollar rebounded and investors squared positions after a rapid rally, while silver fell more than 9%, with the focus turning to the U.S. Federal Reserve policy stance.

Spot gold fell 0.7% to $1,929.35 per ounce by 1000 GMT, retreating from a record $1,980.57 hit earlier, as traders took profits.

U.S. gold futures slipped 0.3% to $1,924.40.

Silver also retreated after rising 6.4% to $26.19 per ounce. It was last down 3.4% at $23.78.

"Gold was way overbought and needed to correct," said StoneX analyst Rhona O'Connell.

"But at the moment everything is supportive; negative interest rates, intensifying geopolitical tensions and massive uncertainty surrounding the economic and financial fallout from the virus."

The dollar index bounced off a two-year low as selling eased ahead of the Fed meeting and on hopes that a massive U.S. fiscal package would be approved.

The Fed, which begins a two-day meeting on Tuesday, is widely expected to reiterate its accommodative policy stance.

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The dollar's slight recovery also pushed gold lower, said ActivTrades chief analyst Carlo Alberto De Casa.

"I expect a consolidation phase between $1,850 and $1,950-$1,960 as the rally was a bit too quick."

The volatility of precious markets prompted the Shanghai Gold Exchange to say it would take risk control measures.

"Periods of consolidation should be healthy, and long-term investors are likely to take advantage of dips to build positions," UBS said in a note, raising its 2020 average gold forecast to $1,740 from $1,650.

Safe-haven gold has rallied about 27% so far this year, mainly supported by growing doubts over an economic recovery from the pandemic and Sino-US tensions.

Non-yielding bullion also benefited from a resultant low interest rate environment and massive stimulus since it's considered a hedge against inflation and currency debasement.

Platinum lost 3% to $916.85 and palladium dropped 2.1% to $2,260.96.

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Editor: Wahyu T.Rahmawati