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PRECIOUS-Spot gold prices pare losses after hitting over two-week low
October 23, 2017 / 2:08 PM / 2 months ago

PRECIOUS-Spot gold prices pare losses after hitting over two-week low

    * Gold pares losses
    * U.S. equities soften, anticipating third-quarter earnings
    * Specs cut net longs in gold for fifth straight week
    * GRAPHIC-2017 asset returns: tmsnrt.rs/2jvdmXl

 (Recasts, updates prices; adds comment, NEW YORK dateline)
    By Renita D. Young and Jan Harvey
    NEW YORK/LONDON, Oct 23 (Reuters) - Gold prices touched an
over two-week low on Monday before paring losses as chart
signals helped offset pressure from a stronger dollar and an
early advance in equities.
    Spot gold        was down 0.01 percent at $1,280.43 per
ounce by 2:53 p.m. EDT (1853 GMT), paring losses on a flurry of
technical buying after hitting its lowest since Oct. 6 at
$1,271.86. 
    U.S. gold futures        for December delivery settled up
$0.40, or 0.03 percent, at $1,280.90 per ounce
    U.S. equities advanced in early trade, weighing on gold.
Stocks pared gains on profit-taking ahead of another week of
third-quarter earnings for U.S. companies.             
    "The new week started positively for the US dollar and
equity markets overnight, causing the buck-denominated gold to
fall further out of favor," said Fawad Razaqzada, technical
analyst for Forex.com, in a note. 
    Gold prices were also under pressure from expectations that
Japan's ultra-loose monetary policy would stay in place after
Prime Minister Shinzo Abe's election victory at the weekend
lifted the dollar to a three-month high versus the yen.
             
    Bullion is highly sensitive to rising U.S. interest rates,
which lift the opportunity cost of holding non-yielding bullion
while boosting the dollar, in which it is priced. 
    The dollar had already posted its biggest one-day gain in a
month on Friday after the U.S. Senate approved a budget
blueprint for the 2018 financial year, allowing Republicans to
pursue a tax-cut package without Democratic support.       
            
   But later in the trading day, "People were buying and gold
reached the 100-day moving average, then buy-stops were
triggered," said a U.S. precious metals trader.
    As traders bought gold at the day's lows, a move to the
100-day moving average at around $1,274 per ounce triggered
buy-stops, said a U.S. precious metals trader.
    U.S. President Donald Trump is considering nominating Fed
Governor Jerome Powell and Stanford University economist John
Taylor for the Federal Reserve's top two jobs. Powell is
considered less hawkish than Taylor, who is seen advocating
higher interest rates.                         
    "As the path toward tax reform in the U.S. begins to take
shape and the identity of next Fed Chair becomes clearer, we are
likely to see the U.S. dollar strengthen further against
majors," MKS said in a note on Monday.
    Silver        was up 0.26 percent at $17.04 an ounce,
earlier hitting $16.84, its lowest since Oct. 9. Platinum       
was up 0.5 percent at $924.90 per ounce and palladium        was
down 1.6 percent at $959.20 an ounce.

    
 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
Edmund Blair and Chizu Nomiyama)
  

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