November 9, 2017 / 4:36 AM / a month ago

PRECIOUS-Gold nudges up as dollar eases; palladium hits fresh 16-yr peak

    * Spot gold may retest resistance at $1,286- technicals
    * GRAPHIC-2017 asset returns: tmsnrt.rs/2jvdmXl
    * Palladium-platinum premium at 16-year high tmsnrt.rs/1QjSZAC

 (Updates prices)
    By Vijaykumar Vedala
    Nov 9 (Reuters) - Gold prices edged higher on Thursday,
after marking a near three-week high in the previous session, as
the dollar eased while palladium hit a fresh peak since February
2001.
    Spot gold        rose 0.2 percent at $1,283.91 per ounce at
0844 GMT. On Wednesday, it rose 0.4 percent and touched its
highest since Oct. 20 at $1,287.13 an ounce.
    U.S. gold futures         for December delivery were up 0.1
percent at $1,284.90. 
    "Gold has been probably tracking the currency (U.S. dollar)
because some of the other drivers which had pushed it to its
recent highs have subsided, in particular the geo-political
risks and safe haven buying," said ANZ analyst Daniel Hynes.
    "I think they'll continue to trade around those currency
moves." 
    The dollar edged 0.1 percent lower against a basket of
currencies       , amid uncertainty over the fate of U.S.
President Donald Trump's tax reform plans.       
    A U.S. Senate tax-cut bill, differing from one in the House
of Representatives, was expected to be unveiled on Thursday,
complicating a Republican tax overhaul push and increasing
skepticism on Wall Street about the effort.             
    "Although the dollar's travails have brought a smile to
long-suffering bullish gold traders, it is important to note
there seems to be an absence of risk aversion premium in gold's
price and that its fate will be decided by the dollar alone,"
said Jeffrey Halley, a senior market analyst with OANDA.
    Spot gold may retest a resistance at $1,286 per ounce, a
break above which could lead to a gain into the range of
$1,292-$1,298, according to Reuters technical analyst Wang Tao.
    Gold demand slid to its lowest in eight years in the last
quarter as jewellery buying fell and inflows into bullion-backed
exchange-traded funds dried up, data from the World Gold Council
showed on Thursday.             
    Among other metals, palladium        gained 0.6 percent to
$1,019.25 an ounce. It touched its highest since 2001 at
$1,023.10.
    "There's been an unease around the platinum market. The
impact and weakening in demand in that sector has subsequently
benefitted palladium. That's why we are seeing that kind of
outperformance in the palladium market, which is also
particularly tight," ANZ's Hynes said. 
    Palladium's premium over platinum hovered near its highest
since 2001. In September, palladium became more valuable than
platinum for the first time in 16 years.
    Platinum is more heavily used in diesel vehicles that have
fallen out of favour since 2015's Volkswagen emissions-rigging
scandal.
    Palladium has benefitted from the switch to petrol engines
and expectations for growth in hybrid electric vehicles, which
tend to be gasoline-powered.
    Meanwhile, silver        was up 0.4 percent at $17.075 an
ounce, while platinum        was almost flat at $931.10 an
ounce.       

 (Reporting by Vijaykumar Vedala in Bengaluru; Editing by
Amrutha Gayathri and Richard Pullin)
  

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