August 31, 2017 / 4:04 AM / a year ago

PRECIOUS-Gold eases as dollar gains on strong economic data

    * Spot gold may test support at $1,295.97/oz-technicals
    * Spot gold set for near 3 pct monthly gain
    * Markets await U.S. non-farm payrolls report on Friday

 (Updates prices; adds comment)
    By Arpan Varghese
    BENGALURU, Aug 31 (Reuters) - Gold slipped on Thursday as
the dollar gained on positive economic data from China and the
United States, but held above a key $1,300-an-ounce level as
safe haven demand due to North Korean tensions capped losses.
    Spot gold        was down 0.4 percent at $1,303.11 per ounce
at 0638 GMT, but was on track for a near 3 percent monthly gain.
    U.S. gold futures         for December delivery eased 0.4
percent to $1,308.50.
    "Gold will be somewhat at the mercy of random month-end U.S.
dollar flows today, with the technical picture still
constructive as long as the $1,284.00 support holds," said
Jeffrey Halley, a senior market analyst at OANDA. 
    Investors discovered a taste for the dollar and commodities
on Thursday as upbeat Chinese and U.S. economic news whetted
appetite for riskier assets globally, even as tensions over
North Korea simmered in the background.                   
    The Commerce Department said its second estimate of U.S.
gross domestic product showed that it increased at a 3.0 percent
annual rate in the second quarter, its quickest pace in more
than two years.             
    U.S. private-sector employers hired 237,000 workers in
August for the biggest monthly increase in five months, a report
by a payrolls processor showed. 
    The ADP National Employment Report figures come ahead of the
U.S. Labor Department's more comprehensive non-farm payrolls
report on Friday.             
    Meanwhile, President Donald Trump declared "talking is not
the answer" to the standoff with North Korea over its nuclear
missile development, but his defense chief swiftly asserted that
diplomatic options remain, and Russia demanded U.S. restraint.
    "Barring a quick resolution to the current stalemate, gold
could remain buoyed above $1,300/oz for some time," OCBC Bank
said in a note.
    The bank revised up its year-end outlook for gold to $1,250
an ounce from $1,200 previously.
    "Despite our revision, gold prices are expected to trend
lower into the fourth quarter given our call for the U.S.
Federal Reserve to hike its benchmark rate by another 25 basis
points before the year is up."
    Spot gold        may test a support at $1,295.97 per ounce,
a break below which could cause a loss to the next support at
$1,287, said Reuters technical analyst Wang Tao.             
    "Given that the rhetoric coming from Japan and the U.S. to
date has been tempered, prices could drift lower," said Cameron
Alexander, an analyst with Thomson Reuters-owned metals
consultancy GFMS.
     Among other precious metals, silver slid 0.3 percent to
$17.33 per ounce.
    Platinum        edged 0.4 percent lower to $982.49 per
    Palladium        was up 0.5 percent to $932.03 an ounce. 

 (Reporting by Arpan Varghese in Bengaluru; Editing by Amrutha
Gayathri and Richard Pullin)
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