October 17, 2016 / 1:22 AM / 10 months ago

PRECIOUS-Gold treads water, possible U.S. rate hike in focus

Oct 17 (Reuters) - Gold prices were mostly unchanged on
Monday on a firmer U.S. dollar after positive U.S. economic data
late last week appeared to raise the chance of an interest rate
hike by year-end.
    
    FUNDAMENTALS
    * Spot gold was mostly flat at $1,250.40 an ounce by
0047 GMT.
    * U.S. gold futures were down 0.3 percent at
$1,252.30 an ounce.
    * U.S. producer prices rose in September to post their
biggest year-on-year rise since December 2014, while retail
sales gained 0.6 percent after a 0.2-percent decline in August.
 
    * Fed Chair Janet Yellen gave a broad review of where the
U.S. economic recovery may still fall short. 
    * Though not addressing interest rates or immediate policy
concerns directly, Yellen laid out the deepening concern at the
Fed that U.S. economic potential is slipping and aggressive
steps may be needed to rebuild it.
    * The dollar index, which measures the greenback
against a basket of currencies, rose as much as 0.2 percent to
98.169.
    * Only 30 percent of Japanese households have experience
investing in stocks and nearly 80 percent say they would not
take on risk even for an investment yielding significant
returns, a survey showed, underscoring the difficulty of
reversing the risk-aversion widely blamed for prolonging Japan's
chronic deflation. 
    * China's producer prices unexpectedly rose in September for
the first time in nearly five years thanks to higher commodity
prices, welcome news for the government as it struggles to
whittle down a growing mountain of corporate debt. 
    * Hedge funds and money managers again reduced their net
long positions in COMEX gold and silver contracts in the week to
Oct. 11, U.S. Commodity Futures Trading Commission data showed
on Friday. 
    * Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, said its holdings rose 0.40
percent to 965.43 tonnes on Friday. 
    * Illegal miners operating at AngloGold Ashanti's 
Obuasi mine in Ghana have ignored a government deadline to
leave, delaying company plans to restart production.
 
    * Demand for gold in India, the world's second-largest
consumer, picked up as the festive season began and discounts
narrowed, while demand across rest of the Asia continued to
improve. 
    * For the top stories on metals and other news, click
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 DATA/EVENT AHEAD (GMT)
    0900 Euro zone Inflation final September
    1230 U.S. New York Fed manufacturing October 
    1315 U.S. Industrial output September

 (Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph
Radford)

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