August 18, 2016 / 4:25 AM / 3 years ago

PRECIOUS-Gold rises on weaker dollar as Fed minutes cool rate hike expectations

* Silver, platinum off 3-week lows hit Wednesday
    * SPDR Gold holdings fall 0.5 percent on Wednesday
    * Gold seen above neutral range of $1,337.22-$1,358.01
-technicals

 (Updates prices)
    By Sethuraman N R
    Aug 18 (Reuters) - Gold rose for a fourth straight session
on Thursday, buoyed by a weaker dollar after minutes from the
U.S. Federal Reserve's July meeting showed several members
expressing caution over hiking interest rates soon.
    The minutes showed that members of the Fed's rate-setting
Federal Open Market Committee were generally upbeat about the
U.S. economy and labour market, but several said any slowdown in
future hiring would argue against a near-term hike. 
    Spot gold was up 0.3 percent at $1,351.94 an ounce at
0645 GMT. 
     U.S. gold climbed 0.6 percent to $1,357.20 an
ounce.
    "Most market participants are now expecting a December rate
hike at the earliest. That means that people are on the side of
buying gold," said Yuichi Ikemizu, head of commodity trading at
Standard Bank in Tokyo.
    "Nobody would be willing to sell gold aggressively even if
there is a hike in rates, with the U.S. presidential elections
in November creating uncertainty."
    Spot gold is biased to rise above a neutral range of
$1,337.22-$1,358.01 per ounce, and could climb into a range of
$1,365-$1,373, according to Reuters technical analyst Wang Tao.
    The dollar index, which measures the greenback
against a basket of six major currencies, stood at 94.448, after
plunging to as low as 94.385, the lowest in more than seven
weeks. The index has lost over 1 percent so far this week.
    A stronger dollar discourages gold-buying by making the
metal more expensive for holders of other currencies.
    "There were mixed expectations on whether there would be one
rate hike or two. Now, we think most likely it will be none,"
said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in
Hong Kong.
    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.
    Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, fell 0.46 percent to 957.78
tonnes on Wednesday. 
    CME on Wednesday lowered COMEX 100 Gold Futures (GC)
maintenance margins for speculators by 10 percent to $5,400 per
contract from $6,000 for August and September 2016. 
    Silver was up 0.6 percent at $19.78 an ounce on
Thursday, after touching a more than three-week low the day
before.
    Platinum rose 1.1 percent to $1,124.70, after hitting
a new three-week low of $1,099.74 in the previous session, while
palladium was up 0.9 percent at $698.10.

 (Additional reporting By Koustav Samanta in Bengaluru; Editing
by Joseph Radford and Biju Dwarakanath)
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