May 10, 2017 / 1:32 AM / 4 months ago

PRECIOUS-Gold inches up from 8-week low as dollar slips

    May 10 (Reuters) - Gold on Wednesday edged up from an
eight-week low hit in the last session as the dollar slipped
after U.S. President Donald Trump fired FBI Director James
Comey, but expectations of a U.S. interest rate hike in June
kept bullion prices under pressure.

    FUNDAMENTALS
    * Spot gold        was up 0.1 percent at $1,221.82 per ounce
at 0105 GMT. It hit $1,213.81 an ounce on Tuesday, its lowest
since March 15.
    * U.S. gold futures         were up 0.5 percent at $1,221.80
an ounce.
    * The dollar slid on Wednesday and the perceived safe-haven
yen gained after U.S. President Donald Trump abruptly fired FBI
Director James Comey in a move that shocked Washington.       
            
    * Also supporting bullion were rekindled fears that North
Korea could be gearing up for another weapons test.
    * In an interview with Sky News on Tuesday, Pyongyang's
ambassador to the United Kingdom, Choe Il, said North Korea is
ready to conduct a sixth nuclear test. Observers of that country
have said such a test was likely, but his comments reminded
markets that tensions could escalate on the recently calm Korean
peninsula.             
    * However, expectations of U.S. monetary policy tightening
next month dragged on bullion prices.
    * Interest rates futures implied traders saw close to a 90
percent chance the Federal Reserve would raise its benchmark
overnight rate by a quarter of a percentage point to a range of
1.00 percent to 1.25 percent at its June 13-14 policy meeting,
according to CME Group's FedWatch tool.
    * Unemployment in the United States has dropped below its
natural equilibrium and could overheat the economy and prompt
faster interest-rate hikes if it were to drop below 4 percent, a
Fed policymaker said on Tuesday.             
    * Kansas City Fed President Esther George said the falling
jobless rate means that adjusting monetary policy is of
"paramount importance".             
    * Parity between platinum and palladium prices is on the way
as the latter metal's market deficit breaches a million ounces a
year, GFMS said on Tuesday -- but it won't be seen just yet.
            

    DATA/EVENT AHEAD (GMT) 
    
    0130  China         Consumer prices        April 
    0130  China         Producer prices        April 
    0645  France        Industrial output      March 
    0645  France        Trade balance          March 
    1030  European Central Bank President Mario Draghi speaks in
the Dutch Parliament
    1230  U.S.           Import prices         April
    1230  U.S.           Export prices         April

 (Reporting by Swati Verma in Bengaluru; Editing by Joseph
Radford)
  

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