June 1, 2018 / 9:58 AM / 3 months ago

PRECIOUS-Gold steadies below $1,300/oz ahead of U.S. payrolls data

    * Italian coalition deal takes pressure off stocks, euro
    * Platinum on track for 1.5-percent weekly gain
    * GRAPHIC - 2018 asset returns: tmsnrt.rs/2jvdmXl

 (Updates prices)
    By Jan Harvey
    LONDON, June 1 (Reuters) - Gold steadied below $1,300 an
ounce on Friday ahead of U.S. payrolls data due later that will
be closely watched for clues on the outlook for U.S. interest
rate policy.
    The U.S. non-farm payrolls report for May is expected to
show the world's largest economy added 188,000 jobs last month,
keeping the Federal Reserve on track to raise interest rates
this month.             
    Gold is highly sensitive to rising rates, which increase the
opportunity cost of holding non-yielding bullion, while boosting
the dollar, in which it is priced. 
    Spot gold        stood at $1,297.14 an ounce at 1120 GMT,
little changed from late on Thursday, while U.S. gold futures
        for August delivery were down 0.2 percent at $1,301.90
an ounce. 
    "Investors will be closely watching the upcoming U.S. NFP
data," Think Markets chief market analyst Naeem Aslam said.
    "Any strength in the average hourly earning would make the
dollar stronger. Robust U.S. NFP numbers would push the gold
price lower...The support of $1,280 would be the target point,"
he said.  
    Gold took little direction from currency markets on Friday,
as a coalition deal put an apparent end to a political crisis in
Italy, allowing the euro to stabilise against the dollar.       
    World stocks also rose and bond yields fell as investors
welcomed the Italian deal, although appetite for risk remained
fragile as concerns simmered over the prospect of a global trade
war.            
    A stand-off between the United States and its trading
partners deepened after the United States on Thursday went ahead
with tariffs on aluminium and steel imports from Canada, Mexico
and the European Union, ending a two-month exemption.
            
    While a worsening global trade situation could benefit gold
if it curbs appetite for assets seen as higher risk, the metal
is still suffering from expectations that the Fed will press
ahead with rate hikes this year. 
    "Bullion is likely to trade reactive to headlines and U.S.
dollar flows," MKS said in a note. "(It needs) to consolidate
above $1,300 to instil confidence in the market for a test
through the 200-day moving average at $1,308."
    Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Shares      , fell 0.52 percent to 847.03 tonnes
on Thursday.          
    Among other precious metals, silver        was up 0.5
percent at $16.42 an ounce, while platinum        was 0.3
percent higher at $903.90 and ounce and palladium        was
flat at $985.45 an ounce.

 (Additional reporting by Karen Rodrigues in Bengaluru
Editing by Mark Heinrich)
  
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