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PRECIOUS-Gold slips as equities, dollar rise
November 22, 2016 / 11:40 AM / a year ago

PRECIOUS-Gold slips as equities, dollar rise

* Dollar index off 13-1/2-year high touched last week
    * Gold gains seen as short-term
    * Palladium strongest in 5-1/2 months

 (Updates prices; adds comment, second byline, NEW YORK
dateline)
    By Marcy Nicholson and Zandi Shabalala
    NEW YORK/LONDON, Nov 22 (Reuters) - Gold edged lower on
Tuesday after U.S. equities hit all-time highs on market
expectations for higher growth and more spending from a Donald
Trump presidency.
    Trump's victory in the Nov. 8 U.S. election initially saw a
flight to safe-haven assets such as gold but the trend quickly
reversed as the dollar and bond yields surged on
expectations of higher U.S. spending and interest rates.
    Spot gold was down 0.14 percent at $1,211.97 an ounce
by 2:18 p.m. EST (1918 GMT). The previous day, bullion advanced
0.4 percent to snap three sessions of losses.
    U.S. gold futures settled up 0.1 percent at
$1,211.20 per ounce.
    Safe haven assets such as gold and the Japanese yen 
are usually the casualties of a flight to risk where the dollar
and stocks perform well.
    "We are still in the Donald Trump honeymoon period which has
taken the equity market quite a bit higher. The market is
looking for global growth to come to the rescue," said Saxo Bank
head of commodity strategy Ole Hansen.
    "The market is resetting its expectations and that is having
a negative impact on precious metals."
    Stocks have rallied since the election as Trump has promised
tax cuts, higher spending on infrastructure and simpler
regulations in the banking and healthcare industries. 
    Gold has fallen more than $100 an ounce from its
post-election peak on Nov. 9 as U.S. Treasury yields posted
their biggest two-week rise in more than five years and the
dollar shot higher.
    "Weakness will likely remain persistent while traders
continue to test the downside in hopes of finding more weakness,
though buying out of Asia seems to be the only real support at
the moment," said Miguel Perez-Santalla, vice president of
Heraeus Metal Management in New York.
    The dollar index, which measures the greenback
against a basket of main currencies, inched closer to recent a
13-1/2-year high after snapping a 10-day rising streak on
Monday. 
    Adding further pressure on gold was the expected rise in
U.S. interest rates in December, traders and analysts said.
    The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust, said its holdings fell 0.71 percent to 908.77
tonnes on Monday. Holdings have fallen 3.6 percent so far this
month. 
    Silver rose 0.3 percent to $16.63 an ounce and
platinum was 0.3 percent higher at $936.99.
    Palladium, which is also used as an industrial metal,
rose by as much as 2.9 percent to $749.40, the highest since
early June.

 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
Adrian Croft and Chizu Nomiyama)

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