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PRECIOUS-Gold hits 6-week high on Trump, Brexit concerns
January 10, 2017 / 11:00 AM / 10 months ago

PRECIOUS-Gold hits 6-week high on Trump, Brexit concerns

* Gold gains on fears around Brexit, Trump
    * SPDR Gold holdings down about 15 pct since U.S. elections
    * Silver climbs to highest since mid-December

 (Updates prices' adds comment, second byline, NEW YORK
    By Marcy Nicholson and Zandi Shabalala
    NEW YORK/LONDON, Jan 10 (Reuters) - Gold rose to a six-week
peak on Tuesday, supported by earlier weakness in the dollar
ahead of a news conference on Wednesday by U.S. President-elect
Donald Trump.
    The market is looking for more clues on Trump's spending
plans in the first speech since his shock election win in
    The pound steadied and stocks rose worldwide after earlier
weakness in the sterling and European equity markets on
fears of a "hard" Brexit after British Prime Minister Theresa
May said over the weekend she was not interested in Britain
keeping "bits" of its EU membership.  
    Gold, often seen as an alternative investment during times
of political and financial uncertainty, benefited from the
risk-averse sentiment in the market.
    Spot gold hit its highest since Nov. 30 at $1,190.46
an ounce, and was up 0.4 percent at $1,185.36 an ounce by 3:19
p.m. EST (2019 GMT). 
    U.S. gold futures settled up 0.05 percent at
    ABN AMRO commodity strategist Georgette Boele said the
combination of a soft dollar, lower U.S. yields and risk
aversion created a supportive environment for gold. 
    "We have this Trump conference coming up tomorrow and the
market seems to be a bit nervous ahead of it," Boele said,
adding that this sentiment would be short-lived as U.S. interest
rates are expected to rise, denting gold.
    Gold is highly sensitive to rising U.S. rates, which
increase the opportunity cost of holding the non-yielding asset
while boosting the dollar, in which it is priced.
    However, ETF Securities analyst Martin Arnold said the
dollar had rallied "too far, too fast" and that a pullback was
likely which would support gold for a while to come.
    Strong physical demand from the Chinese new year also buoyed
prices, Marex Spectron's head of precious metals David Govett
said. He said investors were starting to buy gold "as the great
unknown of the Trump presidency looms."
    Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, fell on Monday. 
    Silver was up 1.3 percent at $16.77 an ounce, after
rising to $16.90, its highest since Dec. 15.
    "This year, we expect demand for silver from the
photovoltaic sector segment to ease slightly, although the
global total will remain comfortably the second highest on
record," said Metals Focus in a note, adding that demand from
the automobile industry will continue as well.
    Platinum bucked the trend, slipping 0.2 percent to
$972.50, while palladium rose 0.4 percent at $761.45.

 (Additional reporting by Swati Verma and Nallur Sethuraman in
Bengaluru; Editing by Alison Williams and Meredith Mazzilli)

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