* Spot gold may test resistance at $1,266 - Technicals
* Silver off one-week high hit on Tuesday
By Apeksha Nair
Oct 19 Gold prices held ground on Wednesday on a
weaker dollar amid uncertainties around the timing of a rate
hike by the Federal Reserve and upcoming U.S. presidential
Spot gold was firm at $1,262.00 an ounce at 0731 GMT.
In the previous session, the precious metal touched $1,264.78,
its highest since Oct 10.
U.S. gold futures was broadly unchanged at $1,262.8
Recent support for gold prices has had to do with the demand
mostly from China and emerging markets, said Richard Xu, a fund
manager at HuaAn Gold, China's top gold exchange-traded fund.
"If you look at the Chinese local gold prices, they are
roughly 2 percent higher than the global gold prices," Xu added.
"The dollar is probably showing some kind of a weakness
after pushing out so high, so that might also help the gold
stabilise for a while."
The dollar stepped back from a seven-month high against an
index of currencies on Wednesday after U.S. consumer prices
showed a moderation in underlying inflation, prompting markets
to trim bets on a December Federal Reserve rate hike.
A Reuters poll showed chances the Federal Reserve will raise
interest rates in December are now put at 70 percent.
Gold is highly sensitive to rising rates, which lift the
opportunity cost of holding non-yielding assets such as bullion,
while boosting the dollar, in which it is priced.
Spot gold may test resistance at $1,266 per ounce, as
suggested by its wave pattern and Fibonacci projection analysis,
according to Reuters technical analyst Wang Tao.
Asian shares rose for a second session as a barrage of
Chinese data confirmed that the economy had stabilised.
"We remain relatively negative on gold short-term despite a
stronger start to the week," INTL FCStone analyst Edward Meir
said in a note.
"We expect further dollar strengthening going into Q4 on
account of an election victory for Hillary Clinton along with
the likelihood of a Fed rate hike."
Among other precious metals, spot silver was steady
at $17.59 an ounce. It hit a more-than-one-week high of $17.71
Platinum and Palladium were also mostly
unchanged at $940 and $637.60, respectively.
(Reporting by Apeksha Nair in Bengaluru; Editing by Sherry