January 23, 2018 / 1:29 AM / 9 months ago

PRECIOUS-Gold steady on weak dollar; stocks surge as US govt shutdown ends

    Jan 23 (Reuters) - Gold prices held steady on Tuesday, as
the dollar pared some losses but remained near a 3-year low amid
a surge in global equities after a U.S. government shutdown came
to an end.
    
    FUNDAMENTALS   
    * Spot gold        was little changed at $1,334.36 an ounce
by 0111 GMT. 
    * U.S. gold futures         were up 0.2 percent at
$1,333.90.
    * Congress voted on Monday to end a three-day U.S.
government shutdown, approving another short-term funding bill
as Democrats accepted promises from Republicans for a broad
debate later on the future of young illegal immigrants.
            
    * Asian stocks advanced on Tuesday after U.S. senators
struck a deal to end the government shutdown, sending Wall
Street's main indexes to record highs.            
    * Market participants await the outcome of the European
Central Bank's meeting on Thursday for possible clues to future
shifts in the bank's monetary policy.
    * The ECB is unlikely to ditch a pledge to keep buying bonds
as rate setters need more time to assess the outlook for the
economy and the euro, three sources close to the matter have
said.             
    * Investors also await a Bank of Japan policy announcement
on Tuesday. Analysts do not expect Japan to signal any policy
shift.
    * The idea of other major central banks moving closer to
more normal policies has been a key headwind for the dollar.
    * Such moves would change the interest rate dynamics of the
past few years, when the U.S. Federal Reserve was the only
central bank raising rates.
    * The dollar's index against a basket of major currencies
       stood at 90.322, not far off its three-year low of 90.113
touched on Jan. 17.       
    * Spot gold has risen about $100 from nearly five-month lows
hit in mid-December, mainly due to weakness in the U.S. dollar.
Analysts have warned that the dollar weakness could have been
overdone, which could lead to short-term correction in gold.
    * A stronger greenback makes dollar-denominated gold more
expensive for holders of other currencies.
    * Russia raised gold holdings in December, according to IMF
data.             
    * Swiss-based commodities fund Tiberius Group plans to make
a foray into cryptocurrencies with the launch of what may be the
first digital money underpinned by physically deliverable metals
including industrials such as aluminium and copper.             
    * The World Gold Council (WGC) is studying the creation of a
global standard for gold kilobars so they can be deployed as
collateral in futures markets and potentially encourage demand,
sources close to the matter said.             
    
   
    DATA AHEAD (IN GMT)
    
    1000  Germany        ZEW economic sentiment          Jan
    1500  U.S.           Richmond Fed composite index    Jan
    1500  Euro zone      Consumer confidence flash       Jan

 (Reporting by Nallur Sethuraman in Bengaluru; editing by
Richard Pullin)
  
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