July 19, 2018 / 4:33 AM / 2 months ago

PRECIOUS-Gold slips to 1-year low as U.S. dollar firms

    * Dollar holds firm after Fed Chairman's testimonies
    * Difficult for gold to break towards $1,236-$1,240- MKS
trader
    * Silver hits 1-year low

 (Adds details; updates prices)
    By Karen Rodrigues
    BENGALURU, July 19 (Reuters) - Gold extended falls to a
one-year low on Thursday as the U.S. dollar firmed after Federal
Reserve Chairman Jerome Powell asserted the need for further
interest rate hikes amid a strong economy.
    Spot gold        was down 0.2 percent at $1,223.56 an ounce
at 0703 GMT. The yellow metal slipped to its lowest since July
last year at $1,220.41 an ounce earlier in the session.
    U.S. gold futures         for August delivery were 0.4
percent lower at $1,223.20 an ounce.   
    "Gold market is just following the U.S. dollar, the dollar
is strong so it's pushing the market down," said Ronald Leung,
chief dealer at Lee Cheong Gold Dealers in Hong Kong.
    "The economy is still good and interest rate still up, so
that's good for the U.S. dollar and negative for gold for the
time being."
    The dollar held firm against its peers, supported by bullish
comments from Powell, which affirmed expectations for at least
two more interest rate hikes this year.       
    "Rallies continue to be well sold and it is difficult to see
a break toward $1,236 - $1,240 (in gold) with the current dollar
strength," MKS PAMP Group said in a note.
    Fed's Powell in a closely watched two-day congressional
testimony, said he believed the United States was on course for
years more of steady growth, and carefully played down the risks
to the U.S. economy of an escalating trade conflict.
            
    However, manufacturers in every one of the Federal Reserve's
12 districts worried about the impact of tariffs, a Federal
Reserve report said on Wednesday, even as the U.S. economy
continued to expand at a moderate to modest pace.             
    U.S. President Donald Trump said on Wednesday the United
States may hammer out a trade deal with Mexico, and then do a
separate one with Canada later, sowing fresh doubts about the
future of the North American Free Trade Agreement (NAFTA).
            
    Spot gold has found a support zone of $1,220-$1,226 per
ounce. It may hover above this zone for one more day or bounce
towards a resistance at $1,237, Reuters technical analyst Wang
Tao said.         
    Among other precious metals, silver        was down 0.8
percent at $15.41 an ounce, after earlier hitting its lowest
since last July at $15.33 an ounce.
    Platinum        was 0.4 percent lower at $810.30 an ounce.
In the previous session, it hit an over two-week low of $798.14.
    Palladium        was down 0.1 percent at $905.47 per ounce.
It fell to its weakest since April 9 at $902.97 on Wednesday.

 (Reporting by Karen Rodrigues in Bengaluru; Editing by
Subhranshu Sahu and Richard Pullin)
  
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