October 18, 2017 / 4:29 AM / 8 months ago

PRECIOUS-Gold slips as dollar firms on speculation over Fed chief

    * Speculation next Fed chair may be policy hawk
    * Trump has pool of five candidates, including Yellen
    * Support level for gold seen at $1281/oz- analyst

 (Recasts, adds comment, updates prices)
    By Apeksha Nair
    Oct 18 (Reuters) - Gold slipped on Wednesday as the dollar
strengthened amid speculation that the next U.S. Federal Reserve
chief may be a policy hawk. 
    U.S. President Donald Trump has a pool of five candidates to
choose from for the next chair of the Federal Reserve and is
likely to announce his choice before going to Asia in early
November, a source familiar with the situation said.
    Current Fed Chair Janet Yellen, whose term expires in
February, is one of the five candidates, the source said.
    Spot gold        was down 0.1 percent at $1,283.16 an ounce
at 0800 GMT. It hit a one-week low of $1,281.31 on Tuesday.
    U.S. gold futures         for December delivery were off 0.1
percent at $1,285 per ounce.
    The dollar edged higher as investors mulled the possibility
of a likely hawkish Fed chair.       
    "All the rhetoric around that is that it's more hawkish...
Just few surprises hitting the market there and helping the
dollar regain footing and keeping yields very steady, so really
putting gold under pressure," a Hong Kong-based trader said. 
    Jerome Powell will likely be the next Federal Reserve
chairman, according to a slim majority of economists in a
Reuters poll - but most of them said Yellen would be the best
    The U.S. central bank is widely expected to raise interest
rates for the third time this year in December.
    Gold is highly sensitive to rising U.S. interest rates, as
they increase the opportunity cost of holding non-yielding
bullion, while boosting the greenback.
    "With dollar strength in mind, it would present further
risks to gold, but I am personally waiting to see how the
Catalonia crisis unfolds tomorrow, pinpointing a possible next
move for gold, in either direction," said Jameel Ahmad, vice
president of market research at FXTM. 
    Catalonia refused on Tuesday to bow to the Spanish
government's demand that it renounce a symbolic declaration of
independence, setting it on a political collision course with
Madrid later this week.             
    Jeffrey Halley, senior market analyst with OANDA, sees
immediate support for gold at $1,281 and towards $1,260.
    In other precious metals, silver        was down 0.2 percent
at $16.96 an ounce, after touching a one-week low in the
previous session.
    Platinum        slipped 0.7 percent to $923.99 an ounce,
while palladium        gained 0.3 percent to $981.47. 

 (Reporting by Apeksha Nair in Bengaluru; Editing by Sunil Nair
and Manolo Serapio Jr.)
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