January 5, 2018 / 2:35 PM / 10 months ago

PRECIOUS-Gold dips as dollar climbs despite lackluster U.S. payrolls data

    * Gold still on track for fourth week of gains
    * U.S. non-farm payrolls data miss forecasts
    * GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

 (New throughout, updates prices, market activity and comments,
adds second byline and NEW YORK dateline))
    By Renita D. Young and Jan Harvey
    NEW YORK/LONDON, Jan 5 (Reuters) - Gold dipped in choppy
trading on Friday as traders cashed in gains from the metal's
rally to 3-1/2-month highs this week and as the dollar rose even
after weaker-than-expected U.S. payrolls data for December.
    Spot gold        was down 0.2 percent at $1,319.70 an ounce
by 1:45 p.m. EST (1845 GMT), off Thursday's high of $1,325.86.
It was still up 1.3 percent from last week's close. U.S. gold
futures        for February delivery settled up 70 cents, or
0.05 percent, at $1,322.30 per ounce. 
    The metal remained on track for a fourth straight weekly
gain, something it has not done since April although it posted
an annual increase of 13 percent in 2017.  
    The U.S. December non-farm payrolls report was weaker than
expected. The dollar dipped briefly, then rose as investors
reckoned the data would not deter U.S. Federal Reserve from
raising interest rates multiple times this year though at a
gradual pace.                                
    "The disappointing jobs report is giving gold a boost, but
the hourly earnings being in line with expectations is holding
it down a bit," said Ryan McKay, commodity strategist at TD
Securities in Toronto.
    Traders overall stuck to their conviction that the Federal
Reserve will raise rates at least twice this year, a Reuters
analysis of fed funds futures contracts traded at CME Group
    Gold is highly sensitive to rising U.S. interest rates, as
these increase the opportunity cost of holding non-yielding
bullion, while boosting the dollar, in which it is priced.
    Investment rotation between different asset classes,
including digital currencies, may also be distracting investors
from gold, said Phillip Streible, senior commodities strategist
at RJO Futures in Chicago. 
    Among other precious metals, silver        was down 0.1
percent at $17.22 an ounce earlier touching its highest point in
more than six weeks at $17.29, and 1.6 percent higher for the
    Platinum        was up 0.8 percent at $967 an ounce, earlier
hitting a 3-1/2 month peak at $969.90, 4.6 percent higher than
last week.
    Palladium        was down 0.8 percent at $1,087.30 per
ounce, also retreating after hitting a record high of $1,105.70
on Thursday. It was 2.5 percent higher on the week.
    It was the best performer among major precious metals last
year, rising 56 percent on fears that rising demand for the
autocatalyst metal would further tighten the market after years
of deficit.

 (Additional reporting by Nallur Sethuraman in Bengaluru;
Editing by Davidv Gregorio and David Goodman)
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