April 22, 2016 / 4:15 AM / 4 years ago

PRECIOUS-Gold dips, silver pares gains as dollar strengthens

* Dollar gains 1 pct vs yen
    * Silver rises but still below 11-month top
    * Goldman Sachs reiterates bearish view on gold

 (Adds Goldman comment, updates prices)
    By A. Ananthalakshmi
    SINGAPORE, April 22 (Reuters) - Gold slipped and silver
pared gains on Friday as the dollar strengthened against the
yen, but both metals were still headed for weekly gains.
    The dollar rose about 1 percent against the yen on Friday,
after Bloomberg reported that the Bank of Japan was considering
applying negative rates to its lending programme for financial
institutions. A stronger greenback makes the dollar-denominated
precious metals expensive. 
    Gold fell 0.3 percent to $1,244.80 an ounce by 0719
GMT, after hitting a five-week high of $1,270.10 an ounce on
Thursday.
    Spot silver was up 0.4 percent at $17.065 an ounce,
after earlier climbing as much as 1 percent. It had risen to a
11-month high of $17.695 in the previous session.    
    Silver is up 5.4 percent for the week, while gold is up 1
percent. 
    But Goldman Sachs maintained its bearish view on gold and
other commodities on Friday, and reiterated its recommendation
to short gold. 
    "We continue to expect that the strengthening of the U.S.
labour market will force the Fed to hike rates three times this
year, which will lead to a stronger dollar and a gradual
increase in U.S. real rates, pushing gold down," Goldman
analysts said in a note.
    Gold had posted its best quarter in nearly 30 years in the
three months to March on expectations that the Federal Reserve
would not be able to raise U.S. interest rates this year due to
volatile markets and concerns over the Chinese economy. 
    Recent data from China has showed new debt fuelling a
recovery in factory activity, investment and household spending,
stoking appetite for metals used in manufacturing. 
    Copper jumped to a four-week high, while steel soared to a
19-month top on Thursday. 
    Silver's rally this week has also been helped by optimism
over Chinese growth, and a break above key chart resistance.
    HSBC analyst James Steel said the gold and silver rallies
could be running into headwinds. 
    "For silver, we favour the market above $17, but expect
volatility and further gains may be hard to hold. On the
positive side, it appears that solar-panel demand is up and
retail demand is solid for silver," Steel said, adding that gold
may need to consolidate around $1,250 before moving higher.
    Among other precious metals, platinum was set to log
its best week in seven with a 4.5 percent rise. It had climbed
to a 9-1/2-month high of $1,043.72 an ounce on Thursday.
    Palladium was poised for a weekly rise of 7 percent,
after climbing to its highest since November on Thursday.
        
    PRICES AT 0719 GMT    
 Metal            Last     Change   Pct chg
                                           
 Spot gold         1244.8    -3.66    -0.29
 Spot silver       17.065    0.067     0.39
 Spot platinum    1023.04     2.04      0.2
 Spot palladium       605        4     0.67
 Comex gold        1246.9     -3.4    -0.27
 Comex silver      17.075   -0.015    -0.09
                                           
 COMEX gold and silver contracts show the
 most active months
 
    

 (Reporting by A. Ananthalakshmi; Editing by Himani Sarkar and
Biju Dwarakanath)
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