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PRECIOUS-Gold rises on dollar drop, fund buying; posts Q2 gain
June 30, 2014 / 10:35 AM / 3 years ago

PRECIOUS-Gold rises on dollar drop, fund buying; posts Q2 gain

* Gold up about 6 percent in June
    * Investors eye ECB meeting on Thursday
    * Coming up: U.S. construction spending Tuesday

 (Updates market activities, quarter-end milestones)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, June 30 (Reuters) - Gold rose nearly 1
percent to its highest since mid-April on Monday, with bullion
posting its second consecutive quarterly gain as heightened
geopolitical tensions boosted its safe-haven appeal.
    The dollar index fell to a six-week low on investor
caution ahead of the U.S. nonfarm payrolls report due Thursday.
Traders also cited window dressing, or end-of-quarter buying, by
funds to improve the appearance of a portfolio. 
    For the quarter, gold has gained about 3.5 percent after a
nearly 7 percent gain in the first quarter, its first
two-quarter rise since 2011, as tensions over Ukraine and Iraq
lifted its appeal as a hedge.  
    Analysts, however, said improving economic conditions and
expected interest-rate hikes by the Federal Reserve were likely
to pressure gold prices in the second half of this year.
    "Price levels above $1,300 an ounce may provide a selling
opportunity as gold's recent gains are unlikely to last over the
longer term," said Christopher Louney, a precious metals analyst
at Barclays Capital.
    Spot gold was up 0.8 percent at $1,325.96 an ounce by
2:31 p.m. (1831 GMT) after hitting a two-month high of
$1,328.14, its best since April 14.
    For June, gold rose 6 percent, its biggest increase in four
months.
    U.S. COMEX gold futures for August delivery settled
up $2 at $1,322 an ounce, with trading volume about 10 percent
below the 30-day average, preliminary Reuters data showed.
    Traders said hedge funds and money managers were more likely
to take profits in the bullion market. They increased their
bullish bets in gold futures and options to the highest since
March in the week to June 24, CFTC data showed. 
  
    Investors also awaited the European Central Bank's meeting
later this week for clues on future monetary stimulus strategy
before placing any big bets.
    Among other precious metals, silver, platinum 
and palladium were all set to post their second straight
quarterly gains.
    Silver added 0.1 percent to $21.03 an ounce, and was
up about 7 percent for the quarter, its highest in three
quarters. 
    Platinum rose 0.6 percent to $1,481.50 an ounce,
while palladium was up 0.2 percent at $839.95 an ounce.
    For the quarter, platinum was poised to rise 5 percent for
its biggest quarterly gain since the third quarter of 2012,
while palladium is set to climb 9 percent. 
    Commerzbank said in a note it expected higher platinum and
palladium prices by year-end on a combination of restricted
supply in the coming months, strong auto demand and inflows into
exchange-traded funds.

2:31 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
               SETTLE   CHNG  CHNG                       VOL
US Gold AUG   1322.00   2.00   0.2  1311.00 1329.20  108,319
US Silver SEP  21.056 -0.078  -0.4   20.805  21.140   43,614
US Plat JUL   1481.00   2.50   0.2  1479.10 1485.20      430
US Pall SEP    843.15   0.30   0.0   840.55  848.00    2,796
Gold          1325.96  10.92   0.8  1310.80 1328.14         
Silver         21.030  0.020   0.1   20.780  21.070
Platinum      1481.50   9.30   0.6  1477.25 1483.00
Palladium      839.95   1.45   0.2   842.50  845.80
TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
               CURRENT   30D AVG  250D AVG   CURRENT     CHG
US Gold        114,592   131,880   164,654     13.66    0.44
US Silver       47,414    68,331    54,449     18.52   -0.49
US Platinum      7,574    17,374    12,159     14.04   -0.40
US Palladium     2,841     6,010     5,864     19.61    0.35

 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Keiron Henderson, David Evans, Diane Craft and
Jeffrey Benkoe)

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