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PRECIOUS-Gold turns up as dollar falls from its highs
September 12, 2017 / 9:39 AM / 7 days ago

PRECIOUS-Gold turns up as dollar falls from its highs

    * World equities hit record high for second straight day
    * Concerns over Korea, Hurricane Irma recede
    * Largest gold ETF sees first inflow since Sept. 5
    * GRAPHIC-2017 asset returns: tmsnrt.rs/2jvdmXl

 (Updates prices; adds comment, byline, NEW YORK dateline)
    By Marcy Nicholson and Jan Harvey
    NEW YORK/LONDON, Sept 12 (Reuters) - Gold bounced up from
the lowest level in more than a week on Tuesday as the dollar
pared gains and U.S. President Donald Trump said U.N. sanctions
on North Korea are "nothing compared to what ultimately will
have to happen."  
    Spot gold        hit its lowest since Sept. 1 at $1,322.15
an ounce in early trade and was up 0.3 percent at $1,330.68 an
ounce by 2:37 p.m. EDT (1837 GMT). 
    U.S. gold futures        settled down 0.2 percent at
$1,332.70.
    Gold prices turned positive after Trump said the latest U.N.
sanctions on North Korea were only a very small step and nothing
compared to what would have to happen to deal with the country's
nuclear program.             
    "That's pretty aggressive rhetoric on his part and that's
brought gold back up," said Bob Haberkorn, senior market
strategist for RJO Futures in Chicago.
    Gold rose to a one-year high last week, but slid 1.4 percent
on Monday in its biggest one-day drop in two months as concerns
eased about North Korea's nuclear ambitions and the impact of
Hurricane Irma.
    "It was the weakness of the dollar that was really driving
gold, and the tensions with North Korea," Natixis analyst
Bernard Dahdah said. "The rate at which the dollar can still
depreciate is slowing down."
    The dollar index        came off its session highs but
remained above Friday's 2-1/2-year low.
    The S&P 500        and a gauge of global equity markets hit
new highs as investors opted for nominally higher-risk assets
over havens such as gold and the Japanese yen.            
    "The market is likely to turn its attention to the Fed, with
speakers now in blackout mode ahead of its policy meeting next
week," ANZ said in a note.
    The Federal Reserve has raised U.S. interest rates twice
this year in response to upbeat growth data and falling
unemployment, but persistently soft inflation figures have
tempered expectations for another hike in December. 
    Gold is highly sensitive to rising U.S. interest rates, as
they increase the opportunity cost of holding non-yielding
bullion, while boosting the dollar, in which it is priced.
    Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Shares      , rose 1.2 tonnes on Monday, data
from the fund showed, after three days of outflows.             
    Among other precious metals, silver        was up 0.3
percent at $17.85 an ounce after hitting its lowest since Sept.
1 at $17.67.
    Platinum        was down 0.5 percent at $985.20, while
palladium        was 1.8 percent higher at $948.30 an ounce.

 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
Dale Hudson and Andrea Ricci)
  

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