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PRECIOUS-Gold prices edge higher as dollar retreats from 14-year high
November 17, 2016 / 3:10 AM / in a year

PRECIOUS-Gold prices edge higher as dollar retreats from 14-year high

* Spot gold may consolidate below $1,235/oz -technicals
    * Fed Chair Janet Yellen testifies at 1500 GMT
    * SPDR Gold holdings down 0.13 percent on Wednesday

 (Updates prices)
    By Apeksha Nair
    Nov 17 (Reuters) - Gold prices rose on Thursday as a rally
in the U.S. dollar showed signs of fatigue after the currency
hit its highest in nearly 14 years against a basket of
currencies the day before.
    Spot gold was up 0.3 percent at $1,228.47 an ounce at
0812 GMT, after dropping 0.25 percent in the previous session.
    U.S. gold futures rose 0.33 percent to $1,228.00 an
ounce.
    The dollar index, which measures the greenback
against a basket of major currencies, slipped 0.23 percent to
100.180, as moderate U.S. inflation data drove a flattening of
the U.S. Treasury yield curve.  
    The index climbed to 100.57 on Wednesday, which was its
highest since April 2003, after a week-long rally mainly driven
by the post-election surge in U.S. bond yields as traders bet
President-elect Donald Trump's administration will adopt
inflationary policies. 
    "The dollar was higher and gold was sold. Now, the dollar
has given away gains and gold is steady," said Yuichi Ikemizu,
head of commodity trading at Standard Bank in Tokyo.
    "It has found a bottom around $1,220 and looks firm." 
    "We need something for gold to follow. At this moment there
is nothing supporting movement and investors are sidelined,"
Ikemizu added. 
    Philadelphia Fed President Patrick Harker said he favoured
raising interest rates and that the U.S. central bank might have
to hike more aggressively if the Trump administration enacts
fiscal stimulus. 
    St. Louis Fed President James Bullard said on Wednesday that
the Fed would hike U.S. interest rates in December barring any
major shocks. 
    Financial markets expect the Fed to hike rates next month
and have begun pricing in a much more aggressive run of rate
increases after Trump promised to boost the U.S. economy with
spending on infrastructure. 
    "Since the gold market has absorbed the likelihood of a
December rate rise, we do not think Mr. Bullard's rate comments
were especially price-negative," said James Steel, chief metals
analyst for HSBC Securities. 
    Fed Chair Janet Yellen's congressional testimony is due
later in the day and will be watched closely for cues on the
economic outlook and rate increases.
    Gold is highly sensitive to interest rates.
    Spot gold has failed to break resistance at $1,235
per ounce and may consolidate below this level, which is above
support at $1,210 for one or more days, according to Reuters
technical analyst Wang Tao. 
    SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.13 percent to
926.26 tonnes on Wednesday. 
    Silver rose 0.36 percent to $17.03 an ounce, while
platinum was down about 0.5 percent at $939.50.
    Palladium rose 0.74 percent at $720.50.

 (Reporting by Apeksha Nair in Bengaluru; additional reporting
by Nallur Sethuraman; Editing by Amrutha Gayathri)

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