March 16, 2017 / 1:19 AM / 9 months ago

PRECIOUS-Gold hits one-week high as Fed signals only gradual rate hikes

    March 16 (Reuters) - Gold prices rose to a one-week high on
Thursday as the dollar fell after the U.S. Federal Reserve stuck
to a less hawkish stance on further interest rate hikes this
year.
       
    FUNDAMENTALS
    * Spot gold        rose 0.3 percent to $1,222.20 per ounce,
the highest since March 7, at 0028 GMT.
    * U.S. gold futures         climbed 1.72 percent to
$1,221.3.
    * Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, rose 0.53 percent to 839.43
tonnes on Wednesday from 834.99 tonnes on Tuesday.          
    * The U.S. Federal Reserve raised interest rates on
Wednesday for the second time in three months, a move spurred by
steady economic growth, strong job gains and confidence that
inflation is rising to the central bank's target.
    * However, the central bank said in its policy statement
that further hikes would only be "gradual," with officials
sticking to their outlook for two more rate hikes this year and
three more in 2018.                           
    * The dollar wallowed at a one-month low early on Thursday
after the Fed sounded less hawkish, while the euro stood tall as
Dutch election exit polls gave the country's prime minister a
big lead over his far-right rival. 
    * The dollar index against a basket of major currencies
extended losses from the previous day, when it slid more than 1
percent, to touch 100.490       , its lowest since Feb. 17.
    * The Netherlands' centre-right Prime Minister Mark Rutte
roundly saw off a challenge by anti-Islam, anti-EU Geert Wilders
in an election on Wednesday, early returns showed, a huge relief
to other EU governments facing a wave of nationalism.
            
    * Intercontinental Exchange (ICE) is set to launch clearing
for London's benchmark gold price auction before participants
are ready as it races to prevent rivals muscling in on the
city's $5 trillion-a-year bullion market, market and banking
sources said.             
         
    DATA AHEAD (GMT)
    1200 Bank of England interest rate decision
    1230 U.S.   Housing starts                  Feb
    1230 U.S.   Building permits                Feb
    1230 U.S.   Weekly jobless claims
    1230 U.S.   Philly Fed business index       Mar

 (Reporting by Arpan Varghese in Bengaluru; Editing by Richard
Pullin)
  

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