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PRECIOUS-Gold slips as investors shrug off N.Korea; Fed rate hike outlook weighs
September 15, 2017 / 3:37 AM / 3 months ago

PRECIOUS-Gold slips as investors shrug off N.Korea; Fed rate hike outlook weighs

    * Spot gold down over 1 pct for the week
    * Palladium off 4-week low touched on Thursday
    * Strong U.S. CPI data supports dollar

 (Recasts, adds comment, milestone; updates prices)
    By Apeksha Nair
    Sept 15 (Reuters) - Spot gold slipped on Friday, shrugging
off North Korea's latest missile launch over Japan, with strong
U.S. inflation data raising the spectre of another interest rate
hike.
    Spot gold        was down 0.2 percent at $1,326.70 an ounce
by 0733 GMT. It was down over 1 percent for the week, on track
for its first weekly decline in four.
    U.S. gold futures         for December delivery gained 0.1
percent to $1,331.
    "There are a couple of issues pushing and pulling at the
market. The reaction to the missile launch this morning has been
a bit negated by that better-than-expected (U.S) inflation
number," said ANZ analyst Daniel Hynes.
    "We need to see a break above $1,340 to get any sort of
sustainable upward trend." 
    North Korea fired a missile on Friday that flew over Japan's
northern island of Hokkaido far out into the Pacific Ocean,
South Korean and Japanese officials said, further ratcheting up
tensions after Pyongyang's recent test of a powerful nuclear
bomb.             
    Geopolitical risks can boost demand for safe-haven assets
such as gold and the Japanese yen.
    The yen slipped against the dollar on Friday, after earlier
having risen on the news, with the greenback supported by strong
U.S. consumer inflation data.                    
    "I think the market is increasingly focusing on the Federal
Reserve and its probability of another rate hike this year,"
Hynes said.
    The Fed has a 2 percent inflation target, and a series of
subdued inflation readings have dampened expectations for
further rate rises in the near term. Firming inflation could
support the case for another rate hike.
     The Fed's next monetary policy meeting is due to begin on
Sept. 19.
     Higher interest rates tend to boost the dollar and push
bond yields up, putting pressure on gold.
    "Traders will be closely watching this evening's retail
sales numbers. Another better-than-expected number could lead to
U.S. dollar strength and continue to cap gold into the week's
end," said Jeffrey Halley, senior market analyst at OANDA.
    Silver        was unchanged at $17.75 an ounce and was set
to mark its first weekly decline in four.
    Platinum        edged down 0.2 percent to $976.74 an ounce
and was down over 2 percent for the week, on track for its
biggest weekly drop since early May.
    Palladium        gained 0.2 percent to $923.95, after
marking a four-week low on Thursday. It was heading for a second
weekly decline.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Kenneth
Maxwell and Joseph Radford)
  

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