April 12, 2018 / 10:19 AM / 3 months ago

PRECIOUS-Gold falls from 11-week high on stronger dollar, profit-taking

    * Gold down after four sessions of gains
    * Syria crisis and U.S.-China trade row underpin gold
    * Silver retreats from highest in nearly two months
    * GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

 (New throughout, updates prices, market activity and comments;
adds second byline and NEW YORK dateline)
    By Renita D. Young and Zandi Shabalala
    NEW YORK/LONDON, April 12 (Reuters) - Gold retreated from an
11-week high on Thursday, with investors booking profits as the
U.S. dollar gained, but bullion's losses were limited as
investors remained worried about rising military tensions in
Syria and lingering concerns of a trade war with China.
    Snapping a four-day winning streak, spot gold        fell
1.1 percent at $1,337.55 per ounce by 1:40 p.m. EDT (1740 GMT).
U.S. gold futures         for June delivery settled down $18.10,
or 1.3 percent, at $1,341.90.
    The dollar index        gained against a basket of
currencies, dragging commodities priced in the greenback.
    "There's profit-taking and a little recovery in the equity
markets," said Chris Gaffney, president of world markets at
EverBank. "There's still a good solid floor underneath the
precious metals with Syria and trade tensions with China, so I
think we've got a floor around $1,340."
    Underpinning bullion was news that British ministers planned
to gather to discuss whether to join the United States and
France in possible military action in Syria that could bring
direct confrontation between Western and Russian forces.
            
    On Wednesday, U.S. President Donald Trump warned Russia of
imminent military action in Syria over a suspected gas attack,
declaring that missiles "will be coming" and lambasting Moscow
for standing by Syrian President Bashar al-Assad.             
    Gold is often used as a store of value during times of
financial or political uncertainty, generally gaining along with
assets such as the Japanese yen and U.S. Treasuries.    
    "Expectations are that $1,350 will act as an initial pivot
point for near-term pricing," said MKS SA precious metals trader
Sam Laughlin.
    "However, more importantly, key downside support around
$1,335 to $1,340 should provide a base for a further test
through the January high of $1,366."    
    The U.S. economy showed signs of strength, minutes from the
last Federal Reserve meeting showed on Wednesday, increasing the
likelihood of U.S. interest rates hikes that could pressure
prices of non-yielding gold.             
    Silver        fell 0.8 percent to $16.49 an ounce after
hitting its highest in nearly two months at $16.87 in the
previous session.
    Platinum        added 0.3 percent to $928.80 per ounce.
Palladium        fell 0.2 percent to $962.22, but has surged by
more than 6 percent so far this week on concerns supply from top
producer Russia could be hurt by U.S. sanctions.             
    U.S. sanctions were likely an initial trigger for a price
rally, UBS said in a note, but palladium was still supported by
strong fundamentals.

 (Additional reporting by Swati Verma in Bengaluru; editing by
David Goodman and David Gregorio)
  
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