November 6, 2017 / 4:51 AM / 8 months ago

PRECIOUS-Gold edges down as firmer dollar, Fed rate hike concerns weigh

    * Dollar hits highest in nearly 8 months vs yen
    * Speculators cut bullish COMEX gold bets for seventh week
    * GRAPHIC-2017 asset returns:

 (Recasts, updates prices)
    By Vijaykumar Vedala
    Nov 6 (Reuters) - Gold prices on Monday held near a one-week
low hit in the previous session, as the dollar firmed after
largely upbeat U.S. economic data reinforced the prospects of
another rate hike by the Federal Reserve next month. 
    Spot gold        was down 0.1 percent at $1,268.61 per ounce
as of 0740 GMT. On Friday, the precious metal touched a one-week
low of $1,265.16.     
    U.S. gold futures         for December delivery were nearly
unchanged at $1,269.  
    The dollar index       , which measures the greenback
against a basket of six major currencies, last stood at 94.990,
trading within sight of an Oct. 27 peak at 95.150, a more than
three-month high.       
    "The strengthening of the dollar due to strong U.S. data has
kept gold prices in check. The movement has been quite
consistent trading within $1,275 an ounce range," said Brian
Lan, managing director at dealer GoldSilver Central in
    The dollar touched its highest level in nearly eight months
against the yen.       
    Markets are increasingly confident the Fed will hike
interest rates in December, which has weighed on the precious
metals complex, said Jordan Eliseo, chief economist at gold
trader ABC Bullion.
    U.S. jobs growth accelerated in October, although wage
growth was tepid, adding to the Fed's assessment last week that
"the labor market has continued to strengthen", with the
sluggish wage data doing little to change expectations.
    Traders see a 90.2 percent chance of a rate hike at the
central bank's next meeting, according to Thomson Reuters data.
    Higher interest rates tend to boost the dollar and push bond
yields up, putting pressure on gold prices by increasing the
opportunity cost of holding non-yielding bullion.
    Analysts said the yellow metal could find support after U.S.
President Donald Trump, who kicked off a 12-day Asia trip,
looked to present a united front with Japan against North Korea.
    Meanwhile, holdings in SPDR Gold Trust      , the world's
largest gold-backed exchange-traded fund, fell 0.03 percent to
845.75 tonnes on Friday.                  
    Hedge funds and money managers reduced their net long
position in COMEX gold contracts for the seventh straight week, 
  in the week to Oct. 31, U.S. Commodity Futures Trading
Commission (CFTC) data showed on Friday.             
    Among other precious metals, spot silver        inched 0.4
percent higher to $16.86 an ounce, platinum        was flat at 
$918.50, while palladium        was up 0.2 percent at $998.50.

 (Reporting by Vijaykumar Vedala in Bengaluru; Editing by
Richard Pullin and Biju Dwarakanath)
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