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PRECIOUS-Gold hits one-year peak as dollar drops on weak U.S. jobs data
September 7, 2017 / 10:21 AM / 2 months ago

PRECIOUS-Gold hits one-year peak as dollar drops on weak U.S. jobs data

    * Dollar index slides to lowest since January 2015
    * ECB sticks to outlook for growth, inflation

 (Recasts with U.S. data, ECB comments, updates prices)
    By Eric Onstad
    LONDON, Sept 7 (Reuters) - The price of gold rose to a
one-year peak on Thursday after the dollar tumbled on the back
of weak U.S. jobs data and an unchanged growth and inflation
outlook from the European Central Bank.
    Spot gold        climbed to an intraday peak of $1,345.25 an
ounce, the strongest since September 2016, before paring gains
to $1,341.54 by 1340 GMT, a rise of 0.6 percent.  It eased 0.3
percent in the previous session.
    U.S. gold futures         for December delivery rose 0.6
percent to $1,346.80.       
    The number of Americans filing for unemployment benefits
jumped to its highest level in more than two years last week
amid a surge in applications in hurricane-ravaged Texas.
            
    The weak data helped push the dollar index        down to
91.405, the lowest since January 2015. 
    "The weaker U.S. economic data pushed the odds for a rate
hike to ground. Clearly the Fed cannot be comfortable with
weaker job market and the fact is that worse is still yet to
come," said Naeem Aslam, chief market analyst at Think Markets. 
    Higher interest rates tend to boost the dollar and push up
bond yields, putting pressure on gold prices by increasing the
opportunity cost of holding non-yielding bullion.
    Also pressuring the dollar on Thursday was a resurgent euro,
which jumped to a nine-day high after the ECB broadly stuck to
its outlook for growth and inflation.                    
    Continuing tensions with North Korea over its nuclear tests
provided further support for safe-haven gold.
    "Geopolitical tensions remain elevated surrounding North
Korea, so I'd expect that would keep gold pretty well supported
in the short term and in the week ahead," said Jonathan Butler,
commodities analyst at Mitsubishi in London. 
     China agreed on Thursday that the United Nations should
take more action against North Korea after its latest nuclear
test, while also pushing for dialogue to help ease tensions.
            
    The market will soon start to shift its focus to the next
U.S. Federal Reserve's next monetary policy meeting, due to
begin on Sept. 19. 
    "I expect some downward pressure on gold starting next week
and a rebound in the dollar short-term," said Samson Li, an
analyst with Thomson Reuters-owned metals consultancy GFMS.
    Silver        rose 0.8 percent to $17.97 an ounce, while
platinum        dipped 0.3 percent to $999.99 an ounce.
    Palladium        added 0.2 percent to $941.10 an ounce.     

 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
Dale Hudson, Greg Mahlich)
  

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