January 17, 2018 / 3:40 AM / 8 months ago

PRECIOUS-Gold prices slip as dollar recovers from 3-yr low

    * Spot gold to test $1,357.54/oz - technicals
    * Platinum hits highest since September

 (Updates prices)
    By Sethuraman N R
    Jan 17 (Reuters) - Gold prices reversed early gains to trade
slightly lower on Wednesday as the U.S. dollar recovered from a
three-year low against a basket of currencies. 
    Spot gold        was down 0.3 percent at $1,334.86 an ounce
by 0641 GMT, after rising to $1,343.91 earlier in the session.
It touched its strongest since Sept. 8 at $1,344.44 on Monday.
    U.S. gold futures         were down 0.1 percent at $1,335.40
an ounce. 
    The dollar index was up 0.3 percent at 90.684       , after
dropping to its lowest since December, 2014 to 90.113 early in
the session.       
    "Most of the move in gold has been dollar denominated ... We
have seen very little change in ETF holdings. There is very
little change in perception of gold in terms of safe haven
demand," said Mark Keenan, global commodities strategist and
head of research - Asia-Pacific at Societe Generale.
    "The outlook for gold in our view is down due to the lack of
physical demand in Asia and the outlook for rate hikes this year
is a headwind for gold."
    The U.S. Federal Reserve is widely expected to raise
interest rates multiple times this year, although at a gradual
pace. 
    Gold is highly sensitive to rising U.S. interest rates, as
these increase the opportunity cost of holding non-yielding
bullion, while boosting the dollar, in which it is priced.
    Asian stocks stepped back from a record high on Wednesday as
the region's resource shares were hit by falling oil and
commodity prices while digital currencies tumbled on worries
about tighter regulations.            
    "While the U.S. dollar remains the most prominent driver of
momentum, we cannot overlook the meltdown in Bitcoin on the back
of regulatory oversight adding to the gold risk premium," said
Stephen Innes, APAC head of trading at OANDA.
    Bitcoin extended its sharp tumble of the past 24 hours,
skidding more than 7 percent on Wednesday in a rapid downturn in
fortunes as investors were spooked by fears regulators might
clamp down on an asset whose value has skyrocketed in the past
year.             
    Spot gold targets its Sept. 8, 2017 high of $1,357.54 per
ounce, as suggested by its wave pattern and a retracement
analysis, according to Reuters technical analyst Wang Tao.
            
    Among other precious metals, spot palladium        was up
0.6 percent at $1,100 per ounce. The metal, which hit a record
high of $1,138 an ounce on Monday, fell nearly 3 percent on
Tuesday. 
    Palladium has had a sustained rally as high demand in the
auto industry fuelled supply concerns, sending Nymex palladium
futures net long positions               to record highs.
    Spot silver        fell 0.3 percent to $17.15 per ounce.
    Spot platinum        was mostly unchanged at $998, after
touching its highest since Sept.8 at $1,006.60

 (Reporting by Nallur Sethuraman in Bengaluru; editing by Biju
Dwarakanath and Subhranshu Sahu)
  
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