July 17, 2018 / 4:39 AM / a month ago

PRECIOUS-Gold edges up on soft dollar ahead of Fed speech

    * Focus turns to Powell's testimony for Fed policy outlook
    * Spot gold expected to break support at $1,237/oz -
technicals
    * SPDR gold holdings down 0.15 pct on Monday

 (Adds comment, updates prices)
    By Apeksha Nair
    BENGALURU, July 17 (Reuters) - Gold prices edged higher on
Tuesday as the dollar remained on the backfoot ahead of U.S.
Federal Reserve Chairman Jerome Powell's first congressional
testimony.
    Spot gold        was up 0.25 percent at $1,243.18 an ounce
at 0723 GMT while U.S. gold futures         for August delivery
were up 0.3 percent at $1,243.20 an ounce. 
    Asian stocks sagged on Tuesday, weighed by a sharp decline
in crude oil prices, and the dollar slipped 0.1 percent against
major peers        as investors awaited Federal Reserve Chairman
Jerome Powell's first congressional testimony for any clues on
the pace of U.S. interest rate rises.                   
    Powell is likely to reiterate the Fed's gradual monetary
policy tightening as he takes his upbeat view of the U.S.
economy to Capitol Hill on Tuesday.              
    Escalating and sustained trade conflicts following U.S.
tariff actions threaten to derail economic recovery and depress
medium-term growth prospects, the International Monetary Fund
warned on Monday.                  
    Markets will be especially interested to see if Powell makes
any comments about global trade tensions and how this will would
affect the rate outlook going forward, INTL FCStone analyst
Edward Meir said in a note.
    Higher U.S. interest rates tend to boost the dollar, in
which the metal it is priced.   
    "Investor appetite for gold is not very strong at the
moment. I think that it is going to be trading sideways for a
long time," said Richard Xu, a fund manager at China's biggest
gold exchange-traded fund, HuaAn Gold. 
    "We've also noticed that Chinese gold ETF liquidity has
dropped a lot these days so that means people do not see any
major breakthrough in either direction," Xu said.
    Demand for gold in top consumer China has been weak as an
ongoing trade war with United States had weakened the local
currency and affected investor sentiment, with prospects of pick
up further dented after data showed slowing growth in the
economy.             
   "If China is slowing down, there will be consequences to
global commodity consumption and that's going to drag gold down
as well," Xu added.
    Spot gold is expected to break a support at $1,237 per ounce
and fall to the next support at $1,226, according to Reuters
technical analyst Wang Tao.             
    Holdings in SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, fell 0.15 percent to 794.01
tonnes on Monday.             
    Meanwhile, silver        rose 0.4 percent to $15.80 an
ounce, platinum        was up 0.1 percent at $822.74 an ounce
and palladium        was 0.2 percent higher at $919.    

 (Reporting by Apeksha Nair in Bengaluru; Editing by Sunil Nair
and Vyas Mohan)
  
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