July 31, 2018 / 10:54 AM / 10 months ago

CORRECTED-PRECIOUS-Gold heads for fourth month of losses, worst streak since 2013

 (Corrects day of the week in the first paragraph to Tuesday
(from Thursday))
    * Dollar index steady ahead of Fed policy meeting 
    * Spot gold biased to fall into $1,206-$1,214 range - techs 

    By Maytaal Angel
    LONDON, July 31 (Reuters) - Gold slipped on Tuesday, heading
for a fourth consecutive month of losses, as a stronger dollar
and rising U.S. interest rates continue to weigh, pushing
speculators to hold record short or sell positions.
    The dollar was flat versus a currency basket, following a
three month streak of gains, with the U.S. Federal Reserve set
to reaffirm the outlook for further gradual rate rises at the
end of its two-day rate review through Wednesday.       
    The U.S. central bank has raised benchmark lending rates
twice this year and signalled two more increases by year's end. 
    Higher rates tend to boost the dollar, making dollar-priced 
gold more expensive for holders of other currencies.
    "The increase in U.S. interest rates so far has undermined a
number of emerging market currencies. This general instability
is seen as deflationary, and doubtless has encouraged (gold)
speculators to take record short positions," said Alasdair
Macleod, head of research at GoldMoney.com.
    Spot gold        fell 0.3 percent at $1,218.2 an ounce at
1037 GMT, heading for a fourth monthly decline that would mark
its longest losing streak since 2013.
    U.S. gold futures         were 0.4 percent lower at
$1,216.80.70 an ounce.
    Hedge funds and money managers net short positions in COMEX
gold stood at 27,156 contracts in the week to July 24, U.S.
Commodity Futures Trading Commission data showed on Friday, the
biggest on records dating back to 2006.             
    In the wider markets, world stocks are set to end July with
the best monthly returns since January, despite trade tensions,
growth fears and a widespread sell off in the global tech
    Rising equities tend to indicate investor appetite for risky
assets as opposed to traditional safe havens like gold.
    "As the US economy continues to do well and the perceived
threat to the economy from the trade tensions appears low, we
believe there is little incentive for U.S. investors to enter
the gold market at the current point in time," said Julius Baer
in a note.
    "Investors remain absent. Stronger demand from China is
offset by weaker demand elsewhere. We stick to our short-term
neutral view as the market lacks a trigger for an imminent
upward or downward move."
    Spot gold is biased to fall into a range of $1,206-$1,214
per ounce, according to Reuters technicals analyst Wang Tao.
    Among other precious metals, silver        slipped 0.4
percent at $15.42 an ounce, platinum        rose 0.5 percent to
$823.55 and palladium        fell 0.4 percent to $925.20.

 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
Jon Boyle)
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