May 3, 2016 / 3:31 AM / 3 years ago

PRECIOUS-Gold eyes $1,300 again as weaker dollar, fund inflows support

* Dollar drops to 18-month low vs yen
    * SPDR fund sees inflow of 20.8 tonnes

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, May 3 (Reuters) - Gold rose on Tuesday, in
another attempt to cross the key $1,300-an-ounce level, as the
U.S. dollar extended losses and as assets of the top bullion
fund rose to their highest in over two years. 
    Gold has rallied sharply since late last week after the
dollar slumped on the Federal Reserve's cautious stance towards
higher U.S. rates and as the yen soared after the Bank of Japan
stood pat on policy last week.
    The metal rose to $1,303.60 an ounce on Monday, its
strongest since January 2015, but ended the day lower on
profit-taking.
    Spot gold had climbed 0.2 percent to $1,293.30 an
ounce by 0633 GMT, after earlier hitting a session high of
$1,296.81.
    "I think gold can reach $1,300-$1,400 in the second quarter.
Investors are following the yen-dollar movement and central bank
decisions, and the ETF inflows are a very good sign," said Mark
To, head of research at Wing Fung Financial Group.
    The dollar set a fresh 18-month low versus the yen on
Tuesday. The dollar index hit its lowest since January
2015. 
    The dollar weakness and strength in the gold price rally
have triggered a sharp increase in money flowing into the SPDR
Gold Trust, the world's top gold-backed exchange-traded
fund.
    Assets of the fund rose 2.59 percent, or 20.8 tonnes, to
824.94 tonnes on Monday in its biggest increase since Feb. 22.
Holdings are at their highest since December 2013.     
    Gold may consolidate in a range of $1,289-$1,304 for a day
before rising again, Reuters technical analyst Wang Tao said.
 
    Investors will be eyeing U.S. data this week to gauge the
strength of the economy and its impact on the Fed's monetary
policy.
    Bullion is sensitive to rising interest rates, which lift
the opportunity cost of holding non-yielding bullion, while
boosting the dollar.
    The key data will be U.S. nonfarm payrolls due on Friday.
The U.S. economy is expected to have added 200,000 jobs in
April, slightly lower than March. 
    "The non-farm payroll report this week may have a neutral
effect on gold given that investors are confident that even if
the figures are good, there would not be any move by the Fed (to
hike rates) until the second half of this year," Wing Fung's To
said.
    Among other precious metals, silver was also near a
15-month high of $18.006 reached on Monday. It edged up 0.4
percent to $17.605 on Tuesday.
    Platinum climbed to a fresh 10-month high of
$1,085.60 in the previous session. Palladium advanced 0.3
percent to $620.

    PRICES AT 0633 GMT    
 Metal             Last     Change    Pct chg
                                              
 Spot gold          1293.3      2.09      0.16
 Spot silver        17.605     0.074      0.42
 Spot platinum        1082       6.5       0.6
 Spot palladium        620         2      0.32
 Comex gold         1295.3      -0.5     -0.04
 Comex silver        17.66    -0.022     -0.12
                                              
 COMEX gold and silver contracts show the most
 active months
 
 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford and
Subhranshu Sahu)
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