September 25, 2017 / 4:25 AM / a year ago

PRECIOUS-Gold falls as dollar firms, N.Korea worries ease

    * Euro slips as Germany's Merkel wins but with less support
    * Platinum hovers near over eight-week lows hit last week

 (Adds analyst commentary, updates prices)
    By Nithin ThomasPrasad
    Sept 25 (Reuters) - Gold prices dropped on Monday, and
hovered around one-month lows hit last week, weighed down by a
firm U.S. dollar and as concerns over the Korean peninsula eased
over the weekend. 
    Spot gold        fell 0.3 percent to $1,293.35 per ounce at
0418 GMT, not far from last week's near one-month low of
$1,287.61. Prices for the yellow metal dropped about 1.7 percent
last week, posting their second consecutive weekly decline. 
     U.S. gold futures         for December delivery were nearly
unchanged at $1,297.10 per ounce.     
   "Merkel's win in the German federal elections and a quiet
news weekend on the North Korean front, saw the U.S. dollar
opening stronger and gold's weekend safe-haven premium eroded
from Friday," said Jeffrey Halley, senior market analyst, OANDA.
    The dollar index        was up 0.1 percent at 92.255 against
a basket of currencies. 
    The euro slipped on Monday after German Chancellor Angela
Merkel won a fourth term in a weekend election, but faced
leading a much less stable coalition in a fractured parliament
as support for the far-right party surged.                     
    "I guess markets are relieved about the ongoing sanctions
against North Korea. If you see what China and (U.S. President
Donald Trump) have done last week, it seems they are trying to
achieve a peaceful resolution," said OCBC analyst Barnabas Gan. 
    On Sunday, the United States said it has added North Korea
to its list of countries that are banned from entering the
    "The (U.S. Federal Reserve) started its balance sheet
reduction last week as well as still pricing in one time rate
hike by year-end," Gan noted.
    Last week, the Fed announced it would begin trimming down
its $4.5 trillion in assets and signalled it will likely raise
rates again this year.             
    "This still has a strong influence in pushing gold prices
lower as well."          
    Meanwhile, physical gold demand remained soft across Asia
this week despite a downwards price correction as consumers
awaited further dips in rates, while a government move to bring
transparency to bullion trading kept buyers on the sidelines in
    In other precious metals, silver        slipped 0.2 percent
to $16.91 per ounce. Prices fell over 3.5 percent last week, its
biggest weekly decline since early July. 
    Platinum        inched 0.1 percent lower to $929.70 per
ounce, but hovered around an eight-week low hit on Thursday. It
posted its second consecutive weekly fall with a decline of 3.5
percent last week. 
    Palladium        gained 0.5 percent to $921.05 per ounce. 

 (Reporting by Nithin Prasad in Bengaluru; Editing by Richard
Pullin and Sherry Jacob-Phillips)
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