January 26, 2018 / 4:09 AM / a year ago

PRECIOUS-Gold heads for weekly gain on weaker dollar

    * Spot gold has gained 1.8 percent this week
    * U.S. President Donald Trump says backs strong dollar
    * Palladium heading for 2nd straight weekly loss

 (Updates prices)
    By Sethuraman N R
    Jan 26 (Reuters) - Gold prices rose on Friday, after falling
from 1-1/2-year highs in the previous session, as the dollar
remained weak despite U.S. President Donald Trump backing a
stronger currency. 
    Spot gold        had climbed 0.6 percent to $1,355.16 per
ounce by 0726 GMT. It has gained 1.8 percent so far this week. 
    Spot gold on Thursday hit 1,366.07, its highest since Aug.
3, 2016, but reversed gains after Trump told CNBC in Davos,
Switzerland, that he wanted to see a strong dollar.             
    U.S. gold futures         were down 0.6 percent at $1,354.70
per ounce. 
    Trump's comment appeared to contradict comments made by
Treasury Secretary Steven Mnuchin a day earlier.              
    The dollar weakness is continuing to support gold prices,
helping to hold them steady despite Trump's comments, said Peter
Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
    "There is some very good support for gold on the downside
around $1,340 and a resistance around $1,360," he said. 
    The dollar index       , a measure of the greenback against
a basket of currencies, hit its weakest since December, 2014 at
88.438 on Thursday. It was last down 0.6 percent at 88.858.
    "While catching short-term speculators off guard, the gold
price retracement will not threaten long-term positions whose
view are cemented around a probable equity market correction and
an extension of the U.S. dollar downtrend," Stephen Innes, APAC
trading head at OANDA said. 
    Gold could break above $1,500 an ounce this year for the
first time since its 2013 crash, GFMS analysts at Thomson
Reuters said on Thursday, with the risk of a drop in surging
equities and political instability boosting its appeal as a
safe-haven investment.              
     Asian stocks edged back from record highs on Friday.
    The break above $1,330 has given fuel to gold's rally and
the first target of this movement could be seen at $1,375,
ActivTrades chief analyst Carlo Alberto de Casa said. 
    "If the gold price jumps above this level, the rally could
continue with targets at $1,390 and potentially at $1,415 ... We
will have a negative signal only if prices fall below
$1,295-$1,300," Alberto de Casa said. 
    Spot silver        rose 1 percent to $17.46. It touched its
highest in more than four months at $17.69 on Thursday. 
    Platinum        edged up 0.5 percent to $1,015. Prices on
Thursday hit their highest since February, 2017 at $1,027.60.
    Palladium        was mostly unchanged at $1,095.60. The
metal was on track for its second weekly loss, dropping nearly 1
percent so far this week. 

 (Reporting by Nallur Sethuraman in BENGALURU; Editing by Vyas
Mohan and Tom Hogue)
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