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PRECIOUS-Gold recovers from 2-month low as dollar weakens
December 6, 2017 / 4:28 AM / 9 days ago

PRECIOUS-Gold recovers from 2-month low as dollar weakens

    * Spot gold may break support at $1,262/oz -technicals
    * SPDR gold holdings down 0.17 pct at 845.47 tonnes

 (Recasts, updates prices)
    By Apeksha Nair
    Dec 6 (Reuters) - Gold prices inched up from a two-month low
on Wednesday, as the dollar weakened on concerns over the
progress of a U.S. tax reform plan.  
    Spot gold        rose 0.2 percent to $1,268.84 an ounce by
0803 GMT after it hit its lowest since Oct. 6 in the previous
session.
    U.S. gold futures         were up 0.5 percent at $1,271.10.
    The dollar edged down on Wednesday, as concerns about a
possible U.S. government shutdown offset optimism about progress
on tax reform legislation.        
    The Republican-controlled U.S. House of Representatives
voted on Monday to go to conference on tax legislation with the
Senate, moving Congress another step closer to a final
bill.             
    However, if lawmakers fail to reach a budget agreement this
week, with government funding deadline approaching, the 
possibility of a government shutdown looms.              
    "Purely technically, gold is range-bound. We think the
dollar strength is not going to last long," said Dominic
Schnider at UBS Wealth Management in Hong Kong.
    "Gold stays under pressure in the short run as the market is
repricing a little bit more Federal Reserve activity next year
and the global economy is sparking an uptrend, earnings coming
in well and the value for safe-haven assets like gold is
diminishing," he said.
    The U.S. Fed is almost certain to raise interest rates next
week at its final monetary policy meeting for the year,
according to a Reuters poll of economists.             
    "We do not think that Trump's tax reforms will create a long
lasting boost to growth nor will they change our stance of two
rate hikes next year," Schnider said.   
    Gold is highly sensitive to rising U.S. rates, as these lift
the opportunity cost of holding non-yielding bullion, while
boosting the dollar, in which it is priced. 
    Meanwhile, holdings in the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust      , fell 0.17 percent
to 845.47 tonnes on Tuesday.          
    Spot gold may break support at $1,262 per ounce, and fall to
the next support level at $1,250, Reuters technicals analyst
Wang Tao said.             
    Among other precious metals, silver        was nearly
unchanged at $16.10 an ounce, after hitting its lowest since
mid-July in the previous session.
    Platinum        eased 0.1 percent to $914.60 an ounce, while
palladium        gained 0.4 percent to $986.80 an ounce.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Joseph
Radford and Biju Dwarakanath)
  

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