June 22, 2018 / 10:30 AM / 5 months ago

PRECIOUS-Gold claws higher on weak dollar, but more downside seen

    * Spot gold may not bottom until $1,250-$1,200: analyst
    * Bullion sold at premium in India

 (Updates prices; adds comment, byline, NEW YORK to dateline)
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, June 22 (Reuters) - Gold prices rose from
six-month lows on Friday as the dollar slipped, but the modest
nature of the recovery suggested speculators might still be
poised to punish the metal further.
    Spot gold        gained 0.2 percent at $1,268.76 per ounce
by 1:34 p.m. EDT (1734 GMT), headed for a 0.8 percent weekly
drop. In the prior session, bullion touched $1,260.84, its
lowest since Dec. 19, 2017.     
    U.S. gold futures         for August delivery settled up 20
cents, 0.02 percent, at $1,270.70 per ounce. 
    "Gold is up with the dollar being a little weak today," said
Michael Matousek, head trader at U.S. Global Investors.
    A weaker greenback makes dollar-denominated gold cheaper for
holders of other currencies.
    Subdued gold reaction shows there's more downside risk, said
Georgette Boele, commodity strategist at ABN AMRO in Amsterdam. 
    "People think since gold failed at the $1,300 level, they
are seeing how far they can push it down and then move it up
again. I would say it should bottom out anywhere between $1,250
and $1,200," Boele said.
    Gold tumbled last Friday after repeatedly failing to
surmount the $1,300 level as speculators rushed to liquidate
long positions and others added bearish positions.
    The dollar dropped from an 11-month peak against a currency
basket as the euro strengthened after a survey showed Euro zone
private business growth recovered in June.                    
    Commerzbank agreed gold was unlikely to recover in the
near-term.
    "If gold is not even in demand as a result of the escalating
trade dispute between the U.S. and China, we do not believe that
the other upcoming events will do much to sway the opinion of
market participants," a note from the German bank said.
    In Asia, gold demand picked up in most centers this week,
with bullion selling at a premium in India for the first time in
seven weeks.             
    Platinum        increased 1 percent at $870.24 per ounce,
poised for a weekly drop of over 1 percent.
    Palladium        gained 0.3 percent at $953.50 per ounce,
headed for a weekly drop of more than 3 percent.
    Earlier in the session, platinum touched $851.74, the
weakest since February 2016, while palladium slipped to a
seven-week low of $947.15 an ounce. 
    Silver        was up 0.8 percent at $16.44 an ounce after
falling to its lowest since May 2 at $16.16 in the previous
session, headed for a 0.3 percent weekly drop.

 (Reporting by Renita D. Young and Eric Onstad; editing by
Alexander Smith and Cynthia Osterman)
  
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