July 5, 2017 / 4:46 AM / 4 months ago

PRECIOUS-N. Korea concerns support gold, Fed minutes in focus

    * N.Korea says its ICBM can carry nuclear warhead
    * Fed meeting minutes due at 1800 GMT
    * Silver holds near 6-month lows touched on Tuesday

 (Updates prices)
    By Nithin ThomasPrasad
    BENGALURU, July 5 (Reuters) - Gold prices edged up on
Wednesday as tensions on the Korean peninsula stoked safe-haven
demand for the metal, while the release of minutes from the U.S.
Federal Reserve's last meeting was also in focus.
    "Safe-haven buying re-emerged in the gold market after the
latest missile test in North Korea," ANZ Research said in a
note.
    "However, traders remain cautious ahead of the impending
release of the FOMC minutes, which could give some clarity
around the Fed's next rate hike."
    Spot gold        had risen 0.2 percent to $1,225.84 per
ounce at 0723 GMT.
    U.S. gold futures         for August delivery climbed 0.5
percent to $1,225.20 per ounce.
    "Asian investors were happy to make some bids due to the
North Korean tensions," said Ronald Leung, chief dealer at Lee
Cheong Gold Dealers in Hong Kong.    
    North Korea on Wednesday said its newly developed
intercontinental ballistic missile (ICBM) can carry a large
nuclear warhead, triggering a call by Washington for global
action to hold it accountable for pursuing nuclear weapons.
               
    Gold is seen as a store of value and therefore a safe-haven
investment in times of economic and political uncertainty, when
investors tend to sell riskier assets such as stocks.
    "It remains to be seen how the North Korean situation will
help (gold prices), but leaving that aside, the only notable
draw we see in the precious metal at the moment is the fact that
it will be running into considerable chart support between
$1,180-$1,200 per ounce," said INTL FCStone analyst Edward Meir.
    Spot gold is expected to test resistance at $1,231 per
ounce, a break above which could lead to a gain to the next
resistance level at $1,238, according to Reuters technical
analyst, Wang Tao.             
    Investors were waiting for the minutes of the Fed's June
meeting, due at 1800 GMT, to gauge how committed the central
bank is to hiking rates again this year. They are also looking
for any detail on plans to wind back the Fed's massive balance
sheet.            
    "We should hear some hawkish talk," said Leung, adding the
Fed will likely focus on trimming its balance sheet before
moving on to raising rates.   
    The dollar index        against a basket of six major
currencies slipped 0.1 pct to 96.154.
    Among other precious metals, silver        was up 0.2
percent at $16.10 per ounce. In the previous session, it fell
below $16 an ounce for the first time since Jan. 3.
    Platinum        advanced 0.5 percent to $905.75 per ounce,
after registering its biggest intraday percentage increase in
two weeks the day before. 
    Palladium        rose 0.2 percent to $853.50 per ounce.

    
 (Reporting by Nithin Prasad and Vijaykumar Vedala in Bengaluru;
Editing by Joseph Radford)
  

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