May 4, 2018 / 9:51 AM / 7 months ago

PRECIOUS-Gold edges up as dollar retreats from day's highs

    * Gold heads for third consecutive weekly decline
    * Dollar rises after mixed U.S. jobs data 
    * Spot gold could bounce to $1,326/oz -technicals

 (Updates prices, headline; recasts throughout)
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, May 4 (Reuters) - Gold prices rose slightly
on Friday as the U.S. dollar backed off its highs, initially
rising after U.S. jobs data was weaker than expected. However
the data was still strong enough to support the case for more
interest rate increases.
    Spot gold        rose 0.2 percent to $1,314.23 per ounce by
3:09 p.m. EDT (1909 GMT), heading for a third consecutive weekly
decline, while U.S. gold futures         for June delivery
settled up $2, or 0.2 percent, at $1,314.70. 
   The dollar index        backed off its highs, but it still
remained in positive territory against a currency basket.
Investors earlier bet that the Federal Reserve will continue
raising rates while other central banks will act more slowly.
      
    A stronger dollar makes commodities priced in the greenback
more expensive for buyers using other currencies. 
    "The dollar's off the high pretty substantially, and I think
that's lending a helping hand to gold," said John Caruso, senior
market strategist at RJO Futures in Chicago.
    "Jobs number was very underwhelming today, and I think gold
is trying to find some footing to potentially find some support
to the upside."
    The U.S. employment data showed U.S. job growth increased
less than expected in April and the unemployment rate dropped to
near a 17-1/2 year low of 3.9 percent.             
    "This is a bit disappointing on the earnings front after the
employment cost index we received last week. Still this is not
enough for the Fed to pause. They will still hike in the June
meeting," said Collin Martin, fixed income strategist at the
Schwab Center For Financial Research in New York.
    Rising interest rates make gold less attractive to investors
because it does not pay interest.
    Next week, gold is likely to be supported as investors worry
about a possible U.S. withdrawal from the Iran nuclear accord,
said Commerzbank analyst Daniel Briesemann.
    If Washington decides to stick with the pact by a May 12
deadline, gold could be pressured, he added.             
    "Even if gold dips below $1,300, the past has shown that
there is buying interest below that level, so we don't expect
gold to drop significantly for the moment," Briesemann said.
    Meanwhile, spot silver        rose 0.6 percent to $16.50 an
ounce, ending the week barely changed.
    Platinum        gained 0.9 percent at $908 an ounce and was
on track for a third weekly fall to end the week about 0.3
percent lower. 
    Palladium        rose 0.2 percent at $963.72 per ounce,
heading for a nearly 1 percent weekly drop.

 (Additional reporting by Eileen Soreng in Bengaluru
Editing by Phil Berlowitz)
  
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