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PRECIOUS-Gold firms on weak dollar, risk aversion
June 23, 2017 / 5:14 AM / 6 months ago

PRECIOUS-Gold firms on weak dollar, risk aversion

    * Spot gold may retest resistance at $1,254 per ounce -
technicals
    * Palladium up over 3 pct for the week

 (Updates prices)
    By Nithin ThomasPrasad
    BENGALURU, June 23 (Reuters) - Gold prices edged higher on
Friday as the dollar softened and risk aversion due to
geopolitical events buoyed the safe-haven appeal of the metal. 
    "Risk aversion is on the rise, mainly due to what's
happening in the Middle East and also the news about China
cracking down on some loans made overseas last year," said
Richard Xu, a fund manager at China's biggest gold
exchange-traded fund, HuaAn Gold.             
    China's banking regulator has ordered a group of lenders to
assess their exposure to offshore acquisitions by a handful of
companies that have been on an overseas buying spree, two people
familiar with the matter said on Thursday.             
    Spot gold        was up 0.3 percent at $1,254.11 per ounce,
as of 0751 GMT, but was nearly flat for the week.
    U.S. gold futures         for August delivery climbed 0.5
percent to $1,255.10 per ounce.
    The political situation in the United States, the UK, and
North Korea-related developments are among the other factors
creating a safe-haven demand for gold, said Brian Lan, managing
director at gold dealer GoldSilver Central in Singapore.
    Tensions rose as North Korea carried out another test of a
rocket engine that the United States believes could be part of
its programme to develop an intercontinental ballistic missile,
a U.S. official told Reuters on Thursday.             
    Gold is used as an alternative investment during situations
of political and financial uncertainty.
    Investors will keep an eye on key U.S. economic data due
next week for cues on the U.S. Federal Reserve's rate hike
decision.         
    U.S. data due next week include the June consumer confidence
indicator, pending home sales, crude oil inventories, revised
first quarter GDP and the PCE price index.             
    "The Fed has mentioned it will most likely raise rates one
more time. The data will be important to know whether it is a
favorable time for the central bank to raise rates," Lan added. 
    Spot gold        may retest a resistance at $1,254 per
ounce, with a good chance of breaking above this level and
rising more towards the next resistance at $1,262, according to
Reuters technical analyst Wang Tao.             
    The dollar was down 0.2 percent against a basket of
currencies, drifting away from the near one-month peak of
111.790 hit on Tuesday.       
    Among other precious metals, silver        gained 1.1
percent to $16.72 per ounce. It was up 0.8 percent for the week.
    Platinum        climbed 0.6 percent to $926.45 per ounce. It
was up 0.5 percent this week.
    Palladium        rose 0.9 percent to $891.60 per ounce, and
was up 3.5 percent this week.

 (Reporting by Nithin Prasad and Vijaykumar Vedala in Bengaluru;
Editing by Richard Pullin and Sherry Jacob-Phillips)
  

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