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PRECIOUS-Gold inches up as dollar tumbles to lowest since Oct
June 29, 2017 / 4:41 AM / 5 months ago

PRECIOUS-Gold inches up as dollar tumbles to lowest since Oct

    * Dollar index hits 9-month low
    * Equity rally curbs gold's gains

 (Updates prices, milestones)
    By Vijaykumar Vedala and Nithin ThomasPrasad
    BENGALURU, June 29 (Reuters) - Gold edged higher on Thursday
as the U.S. dollar weakened against other currencies on bets
that central banks in Europe were preparing to scale back
monetary stimulus, but the bullion's gains were capped by a
surge in equities.
    The dollar index, which tracks the greenback against a
basket of six major rival currencies, fell to its weakest since
early October on Thursday at a low of 95.685.             
    A weaker greenback makes dollar-denominated gold cheaper for
holders of other currencies and can increase demand.   
    Spot gold        rose 0.1 percent to $1,249.79 per ounce at
0740 GMT.
    U.S. gold futures         for August delivery rose 0.1
percent to $1,249.70 per ounce.        
    "Despite the headwinds being generated by a weaker dollar,
more substantial gains in gold were held in check on account of
the fact that the U.S. stock market soared on Wednesday," said
INTL FC Stone analyst Edward Meir. 
    Meir said the same theme was likely to continue through what
was left of the week. 
    Hawkish comments from European Central Bank President Mario
Draghi, and Bank of England Governor Mark Carney have raised
expectations of a tighter monetary policy in Europe. 
    Draghi earlier this week hinted the ECB could trim its
stimulus this year, but according to some sources his remarks
were intended to signal tolerance for a period of weaker
inflation and not imminent policy tightening.
    Governor Carney said on Wednesday, though, a rise in British
interest rates is likely to be needed and the Bank of England
will debate when to do so "in the coming months".               
    Comments from two top Bank of Canada policymakers have also
increased hopes of an interest rate hike next month.            
    "Gold strength is not enough if compared to the weakness in
the dollar. If this weakness in the dollar continues, I think
gold should go up a bit more," said Yuichi Ikemizu, Tokyo branch
manager at ICBC Standard Bank.     
    MSCI's broadest index of Asia-Pacific shares outside Japan
                on Thursday gained 0.8 percent to its highest
since May 2015. This follows Wednesday's sharp Wall Street rally
when the benchmark S&P 500 index scored its biggest one-day
percentage gain in about two months.                         
    Among other precious metals, spot silver        was up 0.1
percent at $16.86 per ounce after touching a two-week high of
$16.90 early in the session. 
    Platinum        was 0.3 percent higher at $922.50 per ounce.
Palladium        gained 0.5 percent to $858.95.

 (Reporting by Vijaykumar Vedala and Nithin Prasad in Bengaluru,
Additional reporting by Koustav Samanta in Bengaluru; Editing by
Richard Pullin and Sunil Nair)

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