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PRECIOUS-Gold turns higher as market awaits cues from Fed meeting
June 13, 2017 / 10:33 AM / 5 months ago

PRECIOUS-Gold turns higher as market awaits cues from Fed meeting

    * Gold rebounds from weakest level since June 2
    * Palladium edges away from 16-year high hit last week
    * Silver hits weakest since May 19

 (Rewrites throughout, updates prices; adds comment, byline, NEW
YORK dateline)
    By Marcy Nicholson and Maytaal Angel
    NEW YORK/LONDON, June 13 (Reuters) - Gold turned slightly
higher on Tuesday, as the market awaited signals of future
monetary tightening by the U.S. Federal Reserve and a Senate
panel's questioning of Attorney General Jeff Sessions about his
dealings with Russian officials. 
    The Fed is widely expected to raise interest rates when it
concludes its meeting on Wednesday, although investors will
focus on any new hints on the pace of hikes this year and its
assessment of the economy and inflation.       
    Gold prices turned higher about an hour-and-a-half before
Sessions faced questions about his dealings with Russian
officials and whether he intentionally misled Congress, as a
Senate panel investigates alleged Russian meddling in the 2016
U.S. presidential election.             
    "Gold's quick recovery from under $1,260 has emboldened
micro-term bulls who may see the outcome of Attorney General
Jeff Sessions' testimony to likely be one-sided," said Tai Wong,
director of base and precious metals trading for BMO Capital
Markets in New York.
    "Whatever Sessions says won't satisfy the braying critics
and there's always a chance something inflammatory drops."
    Spot gold        was up 0.16 percent at $1,267.10 an ounce
by 2:46 p.m. EDT (1846 GMT), after hitting a session low of
$1,259.16, its weakest since June 2.
    U.S. gold futures         for August delivery settled down
$0.3, or 0.02 percent, at $1,268.60. 
    The Fed, which is scheduled to make a statement at 2 p.m.
EDT (1800 GMT), may also provide more detail on its plans to
shrink the mammoth bond portfolio it amassed to nurse the
economic recovery.             
    "Obviously ahead of the meeting people aren't building
significant positions. ... If anything, they're expecting a
dovish Fed because recent (U.S.) economic data has been weak,"
said Fawad Razaqzada, analyst at FOREX.com.
    A lower-than-expected pace of rate hikes would weigh on the
dollar, making dollar-priced gold cheaper for non-U.S.
investors. The dollar index        turned lower on Tuesday.
           
    Among other precious metals, palladium        edged away
from a 16-year high hit on Friday, and was last down 1.4 percent
at $882.80 an ounce.
    "As there is no visible shortage of palladium for industrial
uses, which account for more than 90 percent of demand, and car
sales have been weaker-than-expected this year, we believe the
rally in palladium prices is unsustainable," said Giovanni
Staunovo, analyst for UBS Chief Investment Office.
    Silver        slipped 0.5 percent to $16.84 per ounce,
having earlier hit $16.68, its lowest since May 19. 
    Platinum        fell 1.5 percent to $925.90 per ounce. 

 (Additional reporting by Nithin ThomasPrasad; Editing by David
Evans and Richard Chang)
  

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