May 23, 2017 / 8:22 PM / 2 months ago

PRECIOUS-Gold falls as dollar bounces from 6-1/2-month lows

4 Min Read

    * Gold awaiting further word from Fed on rates -analyst
    * Platinum hits highest price in nearly a month
    * Silver touches three-week high

 (Adds comments, updates prices, adds NEW YORK dateline)
    By Devika  Krishna Kumar and Maytaal Angel
    NEW YORK/LONDON, May 23 (Reuters) - Gold prices fell on
Tuesday, as the U.S. dollar rebounded from 6-1/2-month lows and
investors shrugged off heightened political risk following a
deadly suicide attack in Britain.
    The blast at a concert hall in Manchester, which killed at
least 22 people, prompted the U.S. dollar to gain against
sterling        but failed to move gold higher. A stronger
dollar makes bullion more expensive for holders of other
currencies. The dollar had fallen sharply against a basket of
currencies        recently, but rose on Tuesday as some traders
booked profits.                   
    "Gold is taking a breather once again; it's struggling to
make it out of this $1,245-$1,265 range," said Ole Hansen, head
of commodities strategy at Saxo Bank.
    "Unless we get other developing (political risk) stories,
the market is not prepared to break this range until further
guidance from the Federal Open Market Committee," he said,
referring to the U.S. central bank's policy-setting committee. 
    Spot gold        was about 0.7 percent lower at $1,250.93 an
ounce by 3:27 p.m. EDT (1927 GMT), having gained about 3 percent
since May 9 when it tumbled to near a two-month low. U.S. gold
futures         settled 0.5 percent lower at $1,255.50 an ounce.
    "With nearly two-thirds of Q2 2017 out of the way, QTD gold
prices have averaged within 0.2 percent of our Q2 2017 price
forecast ($1257/oz versus $1259/oz)," RBC Capital Markets said
in a note.
    "While prices may trade away trough the balance of the
quarter, we remain confident in a slight upward skew in prices
on average (driven by unanticipated risks)."      
    Gold has been supported by weakening U.S. economic data and
troubles facing U.S. President Donald Trump, all of which have
weighed on the greenback. 
    Still, Fed fund futures were up, showing a 75 percent chance
of an interest rate increase next month, which deterred
investors from pushing gold higher.
    Separately, Wall Street ticked higher as the Trump
administration's budget proposal called for slashing healthcare
programs and boosting military spending. European shares
advanced on encouraging economic data that helped to lift the
euro to a six-month high against the dollar.                  
    Silver        was down 0.4 percent at $17.05 an ounce,
having touched a three-week peak of $17.30 earlier.
    Platinum        fell 0.2 percent to $944 an ounce after
hitting $957.50, its highest level in nearly a month.
    Palladium        rose 0.3 percent to $772.6 an ounce, having
dropped to more than a two-month low in intraday trading on
Monday before ending that session up 1.5 percent, its biggest
one-day gain since April 20.

 (Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by David Goodman and Paul Simao)
  

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