August 16, 2016 / 4:15 AM / 3 years ago

PRECIOUS-Gold rises as U.S. rate hike prospects lose steam

* Markets await U.S. consumer prices, housing starts,
industrial output due Tuesday
    * Technical resistance for gold seen at $1,350
    * Platinum recovers from near 3-wek lows hit early Tuesday

 (Updates prices)
    By Sethuraman N R
    Aug 16 (Reuters) - Gold rose for a second day on Tuesday as
the dollar weakened on  lower expectations of a U.S. Federal
Reserve interest rate hike this year. 
    Spot gold was up about 0.7 percent at $1,348.86 an
ounce at 0639 GMT. The metal rose 0.2 percent on Monday.
    U.S. gold rose 0.5 percent to $1,354.70 an ounce.
    "The gold market is in the balance of long and short buyers.
 Both sides are waiting for more economic data to determine the
trend," said Jiang Shu, chief analyst at Shandong Gold Group.
    "Most investors are not very aggressive as they are not
certain about which road they should choose."
    Markets will look to U.S. data later in the day including
consumer prices, housing starts and industrial output for
another chance to gauge the health of the economy. 
    Spot gold may revisit its Aug. 12 low of $1,333.50 per
ounce, as it could have completed a bounce from this level,
Reuters technical analyst Wang Tao said.
    "Initial resistance for gold is at the important $1,350
level, whilst first support comes in around $1,335-1,336," 
trading firm MKS Pamp said in a note.
    Central bankers and governments must come up with new
policies to buffer their economies against persistently low
interest rates that threaten to make future recessions deeper
and more difficult to avoid, San Francisco Fed President John
Williams said. 
    The dollar hit a one-month low against the yen on Tuesday,
staying on the defensive after recent U.S. economic data were
seen likely to limit the prospects of a near-term Fed interest
rate hike. 
    The dollar index was down 0.6 percent to $95.091
against a basket of currencies.
     A stronger dollar discourages gold buying by making the
metal more expensive in other currencies. 
    Asian shares rose to one-year highs, expanding their gains
this year to 10 percent, supported by a jump in oil prices and
investor expectations of an extended phase of easy monetary
policy around the globe. 
    Soros Fund Management LLC sharply cut its shares in gold in
the second quarter, while New York-based Paulson & Co, led by
John Paulson, kept its stake in SPDR Gold Trust unchanged, U.S.
Securities and Exchange Commission filings showed on
    Silver was up 1.2 percent at $20.03 an ounce.
    Platinum, which hit a near three-week low of
$1,105.50 earlier in the session, was up 1.7 percent at
    Palladium was up about 0.5 percent at $697.20. It hit
a three-week low of $679.72 on Monday.

 (Reporting By Nallur Sethuraman in Bengaluru; Editing by
Richard Pullin and Subhranshu Sahu)
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