September 1, 2017 / 4:21 AM / 23 days ago

PRECIOUS-Gold edges lower, but N.Korea worries lend support

    * Investors focus on U.S. jobs data, due later in the
session
    * Gold set for weekly gain of over 2 pct
    * Silver on track for 3 pct gain for the week

 (Updates prices)
    Sept 1 (Reuters) - Gold inched lower on Friday as mild
profit-taking set in after recent rallies and as investors
awaited U.S. jobs data for direction on interest rates, but
safe-haven demand kept prices near 9-1/2 month highs as tensions
over North Korea lingered.
    Spot gold        was down 0.2 percent at $1,318.81 per ounce
as of 0653 GMT, not far from the more-than-nine-month high of
1,325.94 hit on Tuesday, and was on track for a weekly gain of
more than 2 percent. 
    U.S. gold futures         were up 0.2 percent at $1,324.20.
    "We have a bit of profit-taking coming in, especially with
the recent rallies to around the $1,325 an ounce levels," said
Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong
Kong.
    Asian equities followed Wall Street's gains overnight and
edged higher on Friday while the dollar's advance slowed ahead
of the U.S. jobs report. 
    The nonfarm payrolls report comes ahead of the U.S. Federal
Reserve's next policy meeting and may influence the timing of
the Fed's rate hike.                   
    Gold is highly sensitive to interest rates, particularly in
the U.S., as higher rates lift the opportunity cost of holding
non-yielding assets and boost the dollar, in which gold is
priced.
    "While the upside of gold could be around $1,350 per ounce,
should the dollar go up, if the jobs data turns out to be
positive, the downside will be limited at the $1,300 level,
given all the uncertainties, including North Korea, that are
still around," said Leung.
     "Investors will also be closely watching the developments
in terms of tensions between the U.S. and Russia."
    South Korean and Japanese jets joined exercises with two
supersonic U.S. B-1B bombers above and near the Korean peninsula
on Thursday, two days after North Korea sharply raised tension
by firing a missile over Japan.             
    Meanwhile, the United States has told Russia to close its
consulate in San Francisco and buildings in Washington and New
York that house trade missions in retaliation for Moscow cutting
the U.S. diplomatic presence in Russia.             
    Geopolitical risks can boost demand for safe-haven assets
such as gold, considered a good store of value during volatility
in other markets.
    "With gold prices roaring back, we think the breakout
pattern now evident on the charts will likely gain further
traction, drawing more quant-based funds in," INTL FCStone
analyst Edward Meir said in a note.
    Silver        eased 0.4 percent to $17.50 per ounce.
    Platinum        dipped by 0.2 percent to $993.55 per ounce,
while palladium        edged up 0.2 percent to $935.50.

 (Reporting by Arpan Varghese in Bengaluru; Editing by Sunil
Nair and Subhranshu Sahu)
  

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