November 29, 2017 / 5:23 AM / 13 days ago

PRECIOUS-Gold edges up but investors largely unmoved by N.Korea test

    * N.Korea says new missile may cover all of U.S.
    * Palladium dips but stays near Tuesday's 17-year peak

 (Updates prices, adds quotes)
    By Vijaykumar Vedala
    Nov 29 (Reuters) - Gold prices crept higher on Wednesday
amid a weaker dollar, while North Korea's latest missile test
had little impact on the safe-haven metal.
    "Gold prices haven't seen any surge and the knee-jerk
reaction to the initial news was very limited," said Naeem
Aslam, London-based chief market analyst at Think Markets.
    "The reason behind this was mainly that we have not seen any
strong reaction from the U.S. despite North Korea's regime
saying that they have completed their nuclear program."
    Spot gold        was up 0.2 percent at $1,295.92 an ounce at
0808 GMT. U.S. gold futures         were up 0.1 percent at
$1,295.50.
    The dollar index       , which measures the greenback
against a basket of six major currencies, was down 0.2 percent.
      
    "Gold has not rallied at all after North Korea's latest
missile test ... It further reinforces that the risk-off
safe-haven premiums associated with gold are gone for now," said
Jeffrey Halley, senior market analyst with OANDA.
    "This leaves it entirely at the mercy of U.S. yields and the
dollar index."    
    North Korea said on Wednesday it tested a new type of
intercontinental ballistic missile (ICBM) that could reach all
of the U.S. mainland.             
    President Donald Trump said the United States "will take
care of" the North Korea issue and that the basic U.S. approach
to dealing with Pyongyang will not change.             
    Geopolitical risks can boost demand for safe-haven assets
such as gold, considered a good store of value during volatility
in other markets.
    The metal traded in a narrow range on Wednesday despite a
raft of economic news out of the United States including
progress on tax cuts and Fed chair nominee Jerome Powell's
confirmation hearing.                            
    "Investors are in a wait-and-see mode and happy with the
$1,270-$1,300 range. People expect a rate hike in December and
are waiting to see the nature of the U.S. tax reforms bill and
details fleshed out," said John Sharma, an economist with
National Australia Bank.  
    The U.S. Senate Republicans rammed forward Trump's tax cut
bill on Tuesday in an abrupt, partisan committee vote that set
up a full vote by the Senate as soon as Thursday, although some
details of the measure remained unsettled.             
    In other metals, palladium        dipped 0.3 percent to
$1,024.74 an ounce, but stayed close to Tuesday's peak of
$1,028.70, its highest since February 2001. 
    "We expect global palladium prices to remain supported in
the coming years due to the metal's use in gasoline and hybrid
vehicles," BMI Research said in a note.
    Silver        recovered slightly from the four-week low hit
in the previous session and was up 0.4 percent at $16.89 per
ounce. Platinum        gained 0.3 percent at $951.60 an ounce.

 (Reporting by Vijaykumar Vedala and Arpan Varghese in
Bengaluru; Editing by Amrutha Gayathri and Gopakumar Warrier)
  

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