November 29, 2016 / 3:41 AM / a year ago

PRECIOUS-Gold edges lower, market focus turns to OPEC

* Speculators cut gold, silver net longs
    * Dollar off recent highs as U.S. Treasury yields pull back
    * Palladium off 18 month-highs touched on Monday

 (Adds milestone, updates prices)
    By Apeksha Nair
    Nov 29 (Reuters) - Gold slipped on Tuesday as the dollar
narrowed losses, with markets on edge ahead of a meeting this
week that could see oil producers curb output.
    Spot gold was down 0.13 percent at $1,191.88 an ounce
as of 0808 GMT. It gained 0.9 percent in the previous session.
    U.S. gold futures were mostly unchanged at $1,191.60
per ounce. 
    "People will be likely watching the OPEC (Organization of
the Petroleum Exporting Countries) meeting. If the meeting leads
to higher oil prices, that should have some inflationary
pressure across the global economies, especially the U.S. and
that could lead to lower gold prices," said Barnabas Gan, an
analyst at OCBC Bank in Singapore.
    Since gold and crude oil are dollar-denominated commodities,
they are strongly linked. 
    "Gold could see a better tone this week assuming that the
dollar takes a bit of a breather from its upward advance and if
U.S. equity markets pause after several weeks of heady gains,"
INTL FCStone analyst Edward Meir said in a note.  
    "The wild card remains oil. A failure by the OPEC to agree
on a credible production cut could send prices (oil) sharply
lower and drag down gold with it."
    "Conversely, we could see the dollar weakening as a result
of oil selling off, so at this stage it is not necessarily clear
what direction gold will take," he said.  
    Oil prices fell on Tuesday on doubts over a meaningful
output cut during Wednesday's meeting. 
    The dollar clawed back some losses as Italian political woes
weighed on the euro. 
    Global growth will pick up faster than expected in the
coming months as the U.S. President-elect Donald Trump
administration's planned tax cuts and public spending fire up
the U.S. economy, the Organisation for Economic Cooperation and
Development said on Monday. 
    Also weighing on bullion was a highly anticipated U.S.
interest rate hike in December by the Federal Reserve, which is
due to next meet on Dec. 13-14.
    "The probability of a rate hike is 100 percent. Market
watchers are looking for a hike and that's why prices are so
weak - under $1,200," OCBC analyst Gan said. 
    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.  
    Speculators cut their net long positions in COMEX gold and
silver contracts in the week to Nov. 22. 
    Silver fell 0.5 percent to $16.55 an ounce, while
platinum rose 0.2 percent to $924.50. 
    Palladium dropped 0.45 percent to $752.48 after
rising to its highest since June 4, 2015 at $760.30 in the
previous session.

 (Reporting by Apeksha Nair in Bengaluru; additional reporting
by Nallur Sethuraman; Editing by Joseph Radford and Subhranshu
Sahu)

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