January 22, 2018 / 3:30 AM / 6 months ago

PRECIOUS-Gold flat after U.S. government shutdown ends

    * Platinum hits highest since early September
    * SPDR Gold holdings rose over 2 percent last week

 (Updates prices, adds comment, NEW YORK to dateline)
    By Renita D. Young and Maytaal Angel
    NEW YORK/LONDON, Jan 22 (Reuters) - Gold steadied on Monday
as the dollar hovered near three-year lows, but bullishness in
the wider financial markets as the U.S. government shutdown
ended capped the metal's gains.
    Before coming off its highs, platinum hit another four-month
peak, earlier narrowing the price gap to sister metal palladium
to below $100 per ounce.
    The U.S. Senate voted to pass a temporary spending plan
through Feb. 8 to end the government shutdown.             
    The dollar pared losses against a basket of currencies and
U.S. stocks surged in afternoon trading after senators reached
the deal, ending the 2-1/2-day shutdown that world markets had
largely taken in stride.                         
    "Gold’s relatively muted today. Most people were looking at
the U.S. government shutdown. Historically you don’t really get
much market reaction to this," said Daniel Ghali, commodities
strategist at TD Securities in Toronto.
    Spot gold        edged up 0.05 percent at $1,332.13 per
ounce by 1:47 p.m. EST (1847 GMT). The precious metal fell 0.5
percent last week, its first weekly decline in six weeks, after
hitting four-month highs last Monday.
    U.S. gold futures         for February delivery settled down
$1.20, or 0.1 percent, at $1,331.90 per ounce. 
    Platinum        dropped 2.1 percent to $991.74 an ounce,
after earlier touching its highest since Sept. 8 at $1,018.80,
while palladium        fell 0.7 percent to $1,096.97 an ounce. 
    "As prices edged above $1,000 per ounce, some money managers
might have wanted to take some profits," Ghali said of platinum,
which has had a sustained rally since mid-December.
    "Recent implementation of more stringent emissions standards
in China is expected to boost demand for (platinum)," SP Angel
said in a note.
    "Stockpiles in warehouses tracked by the New York Mercantile
Exchange have shrunk to their lowest since 2016. With 70 percent
of global supply sourced in South Africa, improving rand-dollar
exchange is raising the relative cost of producing the metal,"
it added. 
    U.S. Treasury yields,             which have tended to fall
during previous government shutdowns, rose as investors saw
limited economic fallout from the political standoff and focused
instead on a global economy motoring ahead and U.S. inflation
pressures.
    Rising yields tend to weigh on gold by increasing the
opportunity cost of holding non-yielding bullion. 
    Silver        was down 0.2 percent at $16.97 an ounce.

 (Additional reporting by Nallur Sethuraman in Bengaluru;
Editing by Dale Hudson and Tom Brown)
  
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