June 7, 2017 / 4:38 AM / 2 months ago

PRECIOUS-Gold holds near 7-mth high ahead of key events

3 Min Read

    * Gold's safe-haven appeal up ahead of UK elections, Comey
testimony, ECB meeting
    * Bullion near highest since Nov hit on Tuesday
    * Palladium hovers near 3-yr high

 (Recasts, updates prices, adds quote)
    By Vijaykumar Vedala
    BENGALURU, June 7 (Reuters) - Gold held near its highest in
seven months on Wednesday ahead of key political and economic
events that are expected to stoke bullion's safe-haven appeal. 
    A national election in the UK, a policy meeting of the
European Central Bank and a Senate testimony by former FBI
director James Comey, due on Thursday, have the potential to
boost the appeal of bullion.            
    Gold is often used as an investment option during times of
political and financial uncertainty. 
    "With the degree of uncertainty around as we head into the
latter half of the week, there would appear to be no reason for
gold's march higher to peter out," said Jeffrey Halley, a senior
market analyst at OANDA. 
    Spot gold        fell 0.1 percent to $1,292.61 per ounce at
0757 GMT. On Tuesday, it rose 1.1 percent to hit its highest
level since November last year at $1,295.97 an ounce.
    U.S. gold futures         for August delivery dipped 0.2
percent to $1,294.9 an ounce. 
    Some very modest profit-taking from fast money-type traders
suppressed gold prices by a dollar or so in early trade, said
Alex Thorndike, a trader at MKS PAMP Group.  
    A U.S. interest rate hike in mid-June should yield a more
expensive greenback and pull gold prices lower, OCBC analyst
Barnabas Gan said. 
    "At $1,290, gold prices look too rich for our comfort. It
has been rallying simply because of safe-haven demand," Gan
said. 
    "Once this driver that underpins the strong gold price
disappears, beyond Thursday and till the end of June, expect
gold to lose its lustre." 
    Holdings in SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, on Tuesday rose 0.49 percent
to 855.16 tonnes.          
    The dollar index        held steady against a basket of
major currencies but stayed close to a near-seven month low hit
on Tuesday. 
    Among other precious metals, spot silver        slipped 0.2
percent to $17.64, platinum        was flat at $955.74, while
palladium rose 0.3 percent at $855.70. 
    On Tuesday, palladium hit its highest since September 2014
at $858.70.             
    

 (Reporting by Vijaykumar Vedala; Additional reporting by
Koustav Samanta; Editing by Tom Hogue and Biju Dwarakanath)
  

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