October 16, 2017 / 4:46 AM / a month ago

PRECIOUS-Gold holds above $1,300 but firm dollar weighs

    * Spot gold may break resistance at $1,305/oz - technicals
    * Silver hits 4-week high
    * Specs cut net longs for 4th straight week
    * Palladium marks highest since February 2001

 (Recasts, adds comment, updates prices)
    By Apeksha Nair
    Oct 16 (Reuters) - Gold steadied above a key psychological
level of $1,300 on Monday, buoyed by worries over Iran, while a
firmer dollar weighed on sentiment.
    Spot gold        was unchanged at $1,304.86 an ounce as of
0734 GMT, while U.S. gold futures         for December delivery
were up 0.2 percent at $1,307.50 per ounce.
    Geopolitical risks, including the ongoing tensions over Iran
and North Korea, are likely to persist this week, Jeffrey
Halley, a senior market analyst with OANDA, said in a note.
    "This should all combine to ensure that gold maintains a
safe-haven tone this week," Halley said.
    The dollar edged up on Monday but lacked momentum, and Asian
shares rallied to a decade high as upbeat Chinese data boosted
commodity prices.             
    The euro extended losses after Catalan leader Carles
Puigdemont failed to give a clear answer to whether or not he
declared independence from Spain.
    On Friday, gold gained about 0.9 percent after U.S.
President Donald Trump warned he might ultimately end a 2015
nuclear agreement with Iran and after data showed underlying
inflation remained muted in the United States.             
    Senior Trump administration officials said on Sunday that
the United States was committed to remaining part of the Iran
nuclear accord for now.                
    The weaker-than-expected U.S. inflation print helped push
Treasury yields lower, giving a fillip to gold trade above
$1,300, said John Sharma, an economist with National Australia
Bank.
    Spot gold may break a resistance at $1,305 per ounce and
rise to the next resistance at $1,318, Reuters technicals
analyst Wang Tao said.             
    "Prices have established themselves above $1,300, although
upside may be little bit limited, we would expect to see them
remain at $1,300-1,310 mark over the course of the week," said
ANZ analyst Daniel Hynes. 
    "The market's still surely pricing in a rate hike this year
by the U.S. Federal Reserve." 
    The U.S economy remains strong and the strength of the
labour market calls for continued gradual increases in interest
rates despite subdued inflation, Fed Chair Janet Yellen said on
Sunday.             
    Rising interest rates tend to boost the dollar and push bond
yields up, putting pressure on the greenback-denominated,
non-yielding gold. 
    Speculators cut their net long position in COMEX gold
contracts for a fourth straight week in the week to Oct. 10,
data showed on Friday.        
    Silver        was up 0.4 percent at $17.41 an ounce after
hitting its highest since mid-September earlier in the session.
    Platinum        eased 0.3 percent to $941.74 an ounce.
    Palladium        was 1.4 percent higher at $1,001.97 an
ounce after earlier hitting its highest since February 2001 at
$1,004.70.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Joseph
Radford and Subhranshu Sahu)
  

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