October 27, 2017 / 3:30 AM / 2 years ago

PRECIOUS-Gold edges down as dollar gains vs euro on ECB policy

    * Spot gold hits near three-week low, set for weekly decline
    * Silver, platinum, palladium on course to end week lower
    * Spot gold may revisit $1,260.16 an ounce - technicals

 (Adds comment, detail; updates prices)
    By Arpan Varghese
    Oct 27 (Reuters) - Gold prices inched down on Friday to hit
their lowest in nearly three weeks, with the dollar gaining
against the euro after the European Central Bank extended its
bond-buying programme.
    Spot gold        had dropped 0.1 percent to $1,265.71 per
ounce by 0656 GMT, after touching its lowest since Oct. 6 at
$1264.45. It was heading for a weekly decline of about 1
    U.S. gold futures         for December delivery shed 0.2
percent to $1,266.70.
    "How gold finishes the week will now be entirely at the whim
of the U.S. dollar and U.S. yields, with little to no
geopolitical safe-haven premium left in the price," Jeffrey
Halley, a senior market analyst with OANDA, said in a note.
    Asian shares gained as technology stocks were boosted by
upbeat earnings from U.S. high-tech giants while the euro
hovered near a three-month low against the dollar after the
European Central Bank extended its stimulus.                   
    "If buoyancy in the greenback and equities continues, we
could see gold testing the support at the October lows around
$1,260, with next key level at $1,250," MKS PAMP analyst Tim
Brown wrote in a note.
    A strong greenback makes dollar-priced gold costlier for
non-U.S. investors. 
    "It looks like we are going to be heading a bit lower from
here, from both the fundamental and technical points of view,"
said INTL FCStone analyst Edward Meir.
    Spot gold may revisit its Oct. 6 low of $1,260.16 per ounce
as it has broken a support zone of $1,271-$1,268, according to 
Reuters technical analyst Wang Tao.             
    An impending decision on the U.S. Federal Reserve's next
chair could also be an important driver for the metal, analysts
    President Donald Trump's search for the next Fed chair has
come down to Fed Governor Jerome Powell and Stanford University
economist John Taylor, Politico on Thursday cited one source as
saying, while another counselled caution.             
    Meanwhile, the U.S. House of Representatives helped pave the
way on Thursday for deep tax cuts sought by Trump and Republican
leaders, underpinning the greenback.             
    Gold is likely to flatline for another year in 2018 as
rising U.S. interest rates clip momentum, while silver forecasts
were cut again after the metal lagged forecasts in the third
quarter, a Reuters poll showed on Thursday. Autocatalyst metal
palladium will struggle to maintain its recent push to 16-year
highs above $1,000 an ounce.            
    Silver        prices shed 0.4 percent to $16.68 per ounce,
platinum        dipped 0.5 percent to $912.60, while palladium
       also slipped 0.5 percent to $964.00. All three metals
were on track for weekly declines.

 (Reporting by Arpan Varghese in Bengaluru; Editing by Gopakumar
Warrier, Sherry Jacob-Phillips and Joseph Radford)
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