July 5, 2018 / 6:52 PM / 4 months ago

PRECIOUS-Gold flat as dollar stays weak after Fed minutes released

    * Federal Reserve meeting minutes fall within market
expectations
    * Dollar falls to one-week low

 (Updates prices, adds new comment after Fed minutes released)
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, July 5 (Reuters) - Gold was little changed
on Thursday, as the U.S. dollar stayed weak for the day and
minutes of the Federal Reserve's June  policy meeting were
within market expectations for the pace of further interest rate
hikes this year.
    U.S. central bankers discussed whether recession lurked
around the corner and expressed concerns global trade tensions
could hit an economy that by most measures looked strong,
minutes of the June 12-13 meeting showed.             
    "Essentially I think these are very well communicated risks
that the market’s had time to digest. The minutes had a dovish
tilt ... but a few hawkish comments at the same time," said
Daniel Ghali, commodities strategist at TD Securities in
Toronto.
    The minutes, which described a meeting in which the Fed
raised interest rates for the second time this year, also
suggested policymakers might soon signal that the Fed's rate
hiking cycle was advanced enough that policy was no longer
boosting nor constraining the economy.
    Spot gold        was flat at $1,255.90 per ounce by 2:27
p.m. EDT (1827 GMT). 
    U.S. gold futures         for August delivery settled up
$5.30, or 0.4 percent, at $1,258.80 per ounce. 
    The dollar index         fell to its lowest level in more
than a week while the euro climbed half a percent to near
three-week highs following strong German data.                
    Ahead of the release, it was widely telecast that the Fed
projected two more rate hikes in 2018 for a total of four.
                        
    Gold is sensitive to rising interest rates, as higher rates
increase the opportunity cost of holding non-yielding bullion,
while boosting the dollar, in which the metal is priced.
    Investors are awaiting the release of non-farm payrolls and
unemployment data on Friday. 
    "One would not like to have any bullish bets on gold when
the labor market trend is strong," ThinkMarkets chief market
analyst Naeem Aslam said. 
    Physical gold demand has been lackluster in India, the
second-biggest gold consumer after China, Commerzbank said,
lending no price support.
    Meanwhile, silver        lost 0.5 percent at $15.96 an
ounce.
    Palladium        increased 0.1 percent at $947.20 an ounce,
while platinum        declined 0.6 percent at $834.75, after
touching its lowest since 2008 at $793 on Tuesday.
    "It's a speculative-driven selloff in platinum, it's not a
fundamental driven selloff," said Jonathan Butler, commodities
analyst at Mitsubishi.
    "And when we think about the fundamentals, at $800, most
South African mines are losing money. So if we maintain these
prices sub-$900, there will eventually be a supply-led
response." 

 (Additional reporting by Karen Rodrigues in Bengaluru; Editing
by Bernadette Baum and Chizu Nomiyama)
  
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