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PRECIOUS-Gold bounces off 5-1/2-month low on physical buying

* Spot gold to hover above $1,204/oz- technicals
    * Speculators cut gold, silver longs
    * SPDR Gold holdings down 0.58 percent on Friday

 (Updates prices, adds milestone)
    By Apeksha Nair
    Nov 21 (Reuters) - Gold prices rose in Asian trade on
Monday, snapping a 3-session losing streak, buoyed by physical
buying after the metal slid to a 5-1/2-month low on Friday.
    Spot gold was up 0.42 percent at $1,213.31 an ounce
by 0655 GMT. In the previous session, the metal fell as much as
1 percent to mark its lowest since May 30 at $1,203.52.
    U.S. gold futures were up 0.4 percent at $1,213.30
per ounce.
    "The low prices have induced some interest in the physical
market," said ANZ analyst Daniel Hynes.
    "However, the dollar has got some momentum behind it and
until a turnaround, it is going to be difficult for gold prices
to recover." 
     The dollar held near 13 1/2-year highs against a currency
basket on Monday, on continued bets of faster inflation and
higher interest rates. 
    Bullion has fallen 5.4 percent this month as of Friday's
close, pressured by nerves around the U.S. election and
speculation over the timing of an interest rate hike by the
Federal Reserve.
    "There are chances for prices to weaken below $1,200 in the
next few weeks leading into the Federal Open Market Committee
(FOMC) meeting," Hynes added.
    Markets now put a 90 percent chance on the Fed hiking rates
by 25 basis points when they meet on Dec. 14. 
    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.
    "We expect gold to continue to struggle against a backdrop
of a firmer U.S. stock market, a stronger dollar and rising
global rates," Edward Meir, analyst with INTL FCStone, said in a
note.
    Spot gold seems to have found a support at $1,204 per
ounce, it may hover above this level for one day or bounce
moderately into a range of $1,222-$1,235, according to Reuters
technicals analyst Wang Tao. 
    Gold premiums in India, the second largest consumer of the
precious metal, jumped to two-year highs in the week to Nov. 18
as jewellers ramped up purchases on fears the government might
curb imports after withdrawing higher-denomination notes from
circulation.    
    Speculators cut their net long position in COMEX gold for
the first time in four weeks, in the week to Nov. 15, and also
reduced it in silver, U.S. Commodity Futures Trading Commission
data showed on Friday. 
    SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.58 percent to
915.29 tonnes on Friday. 
    Silver gained 0.77 percent to $16.71 per ounce.
    Platinum rose 0.54 percent to $925.50 and palladium
 was up 0.35 percent to $726.97 an ounce.

 (Reporting by Apeksha Nair in Bengaluru; additional reporting
by Nallur Sethuraman; Editing by Michael Perry and Biju
Dwarakanath)
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