June 8, 2018 / 10:02 AM / 4 months ago

PRECIOUS-Gold edges up ahead of G7, dollar recovery caps gains

    * Gold holds within narrowest weekly range in 11 years
    * Silver eyes biggest weekly rise in seven weeks 
    * GRAPHIC-2018 metals price performance: tmsnrt.rs/2jvdmXl

 (Updates prices; adds comment, byline; NEW YORK to dateline)
    By Renita D. Young and Jan Harvey
    NEW YORK/LONDON, June 8 (Reuters) - Gold firmed on Friday as
a rise in risk aversion ahead of G7 talks this weekend lent
support, but the yellow metal remained hemmed within its
narrowest weekly range in over a decade as a recovery by the
dollar capped gains. 
    Expectations that the Federal Reserve will announce another
U.S. interest rate hike next week also pressured gold. Higher
rates lift the opportunity cost of investing in non-yielding
assets, such as bullion. 
    Spot gold        inched up 0.1 percent to $1,298.11 per
ounce by 1:35 p.m. EDT (1735 GMT), while U.S. gold futures
        for August delivery settled down 30 cents, or 0.02
percent, at $1,302.70 per ounce. 
    Gold has hardly budged since last Friday's close, with the
spread between its highs and lows at just $13.70 an ounce - the
narrowest of any week since August 2007. Bullion headed for a
weekly rise of 0.4 percent.
    World stocks fell as expectations of trade tensions
dominating this weekend's G7 summit weighed on risk sentiment.
The dollar edged off a three-week low rising against the euro.
                  
    Ahead of the G7 summit in Canada, leaders of the seven rich
countries were seen as more divided than at any time in the
group's 42-year history, as Trump's "America First" policies
risk causing a global trade war and deep diplomatic schisms.
            
    "Gold is up today, but not doing much. The G7 talks are a
bit disconcerting with tariffs. We have the Fed meeting coming
on Wednesday keeping a lid on gold," said Patrick Magilligan,
director of metals marketing for Key Metal Refining.
    "The June 12 meeting with (North) Korea, probably underneath
the gold price, keeping it buoyant," he added.
    U.S. President Donald Trump is set to meet North Korean
leader Kim Jong Un in Singapore on June 12, the same day as the
Federal Open Market Committee starts its two-day meeting on U.S.
monetary policy.
    "It'll be important what the direction from the Fed is ...
We are still expecting two more hikes after next week," said ABN
Amro analyst Georgette Boele. 
    A European Central Bank meeting on rates on Thursday is also
in focus for traders next week. 
    Silver        increased 0.2 percent at $16.70 an ounce,
after hitting its highest in more than six weeks on Thursday. 
    It was on track for a 2.3 percent rise for the week, its
biggest in seven weeks. It is poised for a rally before the end
of the year, traders said.
    Palladium        dropped 0.3 percent at $1,008.75 an ounce,
on track for a 0.8 percent weekly increase. Platinum       
gained 0.3 percent at $899.50 an ounce, headed for a 0.4 percent
weekly rise.

    
 (Additional reporting by Karen Rodrigues in Bengaluru; editing
by Susan Fenton and G Crosse)
  
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