Gold gains on dollar pullback after weak U.S. data

Gold gains on dollar pullback after weak U.S. data

* Focus on Fed Chair Powell's speech at Jackson Hole on Friday

* Dollar index .DXY falls 0.6%

By Ashitha Shivaprasad

Aug 23 (Reuters) - Gold rose on Tuesday, snapping six straight sessions of losses, helped by a pullback in the dollar and lower Treasury yields following weak U.S. business activity data.

Spot gold XAU= rose 0.9% at $1,750.59 per ounce by 10:33 ET (1433 GMT). Prices slipped in the last six sessions and hit $1,727.01 on Monday, the lowest since July 27.

U.S. gold futures GCv1 rose 0.9% to $1,764.20.

"Dollar and yields have dipped after the weak flash PMI data, helping gold," said Edward Moya, senior analyst with OANDA.

"Also, the data indicates a major contraction, showing the economy has weakened quickly, opening the door to the idea that the Fed might not be that aggressive, further helping gold."

U.S. private-sector business activity contracted for a second straight month in August to its weakest in 18 months.

The dollar index .DXY slipped 0.6%, making gold cheaper for overseas buyers. U.S. Treasury yields also declined.

Focus was now on Fed Chair Jerome Powell's speech at an annual global central banking conference in Jackson Hole, Wyoming, on Friday.

Bullion tends to suffer in a high rate environment as it yields no interest.

"If (gold) prices are able to breach $1,724, a selloff towards $1,700 is on the cards. Alternatively, a move back above $1,752 may open a path towards $1,770 and $,1800, respectively," FXTM analyst Lukman Otunuga said.

Meanwhile, business activity across the euro zone contracted for a second straight month in August as the cost of living crisis forced consumers to curtail spending while supply constraints continued to hurt manufacturers, a survey showed.

"Europe is going into a recession, China is seeing a slowdown. Gold is eventually going to see some safe-haven trade again," Moya added.

Spot silver XAG= rose 0.9% to $19.18 per ounce, while platinum XPT= gained 0.4% to $879.31. Palladium XPD= was 0.3% lower at $1,990.23.
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Shounak Dasgupta