November 27, 2017 / 4:48 AM / a year ago

PRECIOUS-Gold edges higher as dollar hits 2-month low vs euro

    * Lack of safe-haven draw in gold despite weak China stocks
    * Investors await Congressional hearing on Fed Chair nominee
    * Spot gold could drop to $1,283 - technical charts

 (Recasts, updates prices)
    By Vijaykumar Vedala
    Nov 27 (Reuters) - Gold prices crept up on Monday as the
dollar touched a two-month low versus the euro, but gains were
limited despite a retreat in Asian equities led by China.
    Heavy selling of blue-chip shares dragged China's stock
markets sharply lower, pressured by the spectre of rising
borrowing costs hitting company profits amid an increasing
regulatory crackdown on risky financing.             
           
    "Thus far we have yet to see any safe-haven premium creep
into gold's price to reflect nervousness in equities and China
bonds," said Jeffrey Halley, senior market analyst with OANDA.  
    Spot gold        had risen 0.2 percent to $1,290.66 an ounce
by 0756 GMT. U.S. gold futures         for December delivery
were up 0.2 percent at $1,290.
    The dollar's losses against the euro, thanks to strong
German business confidence, made dollar-denominated gold cheaper
for holders of other currencies.       
    "The inverse relationship between the dollar and gold prices
is in effect," said Mark To, head of research at Hong Kong's
Wing Fung Financial Group. 
    "But I don't think that kind of relationship is robust
enough to wager larger bets ... While prices are moving up,
movement will still be rangebound."   
    Investors will be looking to the Congressional hearing on
Federal Reserve Chair nominee Jerome Powell on Tuesday. 
    Last week, minutes of the Fed's previous meeting revealed
that some policymakers had voiced concerns over inflation
outlook and emphasized they would be looking at upcoming
economic data before deciding the timing of future rate
rises.               
    Gold is highly sensitive to rising rates, which lift the
opportunity cost of holding non-yielding assets such as bullion,
while boosting the dollar, in which it is priced.    
    Also on Tuesday, U.S. President Donald Trump will meet
Senate Republicans to discuss their party's efforts to pass tax
reform legislation.             
    Spot gold is biased to drop to $1,283 per ounce, as it
failed to break resistance at $1,296, according to Reuters
technical analyst Wang Tao.             
    Among other precious metals, silver        rose 0.5 percent
to $17.057 an ounce, while platinum        was flat at $940.50
an ounce. Palladium        slipped 0.4 percent to $993.50 an
ounce.   

    
 (Reporting by Vijaykumar Vedala in Bengaluru; Editing by Joseph
Radford and Manolo Serapio Jr.)
  
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