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PRECIOUS-Gold drops to lowest in nearly 4 mths as higher US yields fuel risk appetite
July 10, 2017 / 4:57 AM / 4 months ago

PRECIOUS-Gold drops to lowest in nearly 4 mths as higher US yields fuel risk appetite

    * Dollar, U.S. Treasuries gain on strong U.S. jobs data
    * Spot gold may fall more to $1,204 per ounce -technicals

 (Recasts, updates prices)
    By Nithin ThomasPrasad
    BENGALURU, July 10 (Reuters) - Gold slid to its lowest in
nearly four months on Monday after the latest U.S. jobs data
boosted stock markets and Treasury yields, crimping demand for
safe-haven bullion.
    Spot gold        had fallen 0.5 percent to $1,207.03 per
ounce by 0738 GMT. It earlier touched its lowest since March 15
at $1,204.45.
    U.S. gold futures         for August delivery dropped 0.3
percent to $1,206.20 per ounce.
    "The fall in gold prices is very much underpinned by
yield-chasing behavior," said OCBC analyst Barnabas Gan. 
    Higher yields on assets such as U.S Treasuries increase the
opportunity cost of holding non-yielding bullion.
    "If (treasury) yields in the U.S. and Europe move higher,
that will most likely cap any gains in gold and will test the
downside again," said Jeffrey Halley, senior market analyst at
    The 10-year U.S. Treasury yield             hit a two-month
high of 2.398 percent on Friday.            
    Data on Friday showed U.S. non-farm payrolls jumped by
222,000 jobs last month, beating expectations of a 179,000 gain.
    The dollar steadied and Asian equities remained supported by
Friday's data. A stronger dollar makes gold more expensive for
buyers outside the United States.                   
    The market also awaited U.S. Federal Reserve Chair Janet
Yellen's testimony on Thursday which could provide further hints
on the central bank's stance on interest rates.             
    Meanwhile, Reuters technical analyst Wang Tao said spot gold
may fall more to $1,204 per ounce, as suggested by its wave
pattern and a Fibonacci projection analysis.
    Holdings at the SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, fell 0.63 percent to 835.35
tonnes on Friday from 840.67 tonnes on Thursday.             
    Hedge funds and money managers in the week to July 3 reduced
their net long positions in COMEX gold and silver for a fourth
straight week, U.S. Commodity Futures Trading Commission (CFTC)
data showed on Friday.             
    Among other precious metals, silver        fell about 2
percent to $15.27 per ounce. In the previous session, it touched
$14.86 an ounce, its lowest in 15 months in what appeared to
have been driven by an accidental order, according to traders.
    Palladium        declined 0.3 percent to $836.18 per ounce
after hitting its lowest since June 2 on Friday. 
    Platinum        dropped 0.5 percent, to $899.00 per ounce.
It touched its lowest since May 4 during the session.

 (Reporting by Nithin Prasad and Arpan Varghese in Bengaluru;
Editing by Richard Pullin and Joseph Radford)

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