December 28, 2017 / 4:08 AM / 10 months ago

PRECIOUS-Gold hits 1-month high as dollar weakens further

    * Dollar index hits near 4-week low
    * Silver touches 1-month high

 (Updates prices)
    By Apeksha Nair
    Dec 28 (Reuters) - Gold prices rose to their highest level
in one month on Thursday in light holiday trade and as the
dollar fell to a four-week low.
    Spot gold        was up 0.4 percent at $1,292.20 an ounce at
0742 GMT, after earlier reaching its highest since Nov. 29 at
$1,292.67.
    U.S. gold futures         were up 0.3 percent at $1,295.30
an ounce.
    The yellow metal has risen for a ninth straight day and is
on track to register gains of over 1 percent this month and
about 12 percent this year.
    "It's the thin market and the dollar moving down that's
pushing up gold," said Ronald Leung, chief dealer at Lee Cheong
Gold Dealers in Hong Kong. "If the dollar continues to weaken,
gold will be looking for $1,300 again."
    There could be some additional buying heading into
resistance at that level, Leung said.    
    The dollar slid broadly on Thursday, hampered by a recent
dip in U.S. 10-year bond yields, while commodity-linked
currencies were bolstered by this week's rally in metals and oil
prices.       
    Meanwhile, digital currency bitcoin, was down 7.5 percent at
$14,225            on the Luxembourg-based Bitstamp exchange.
    Gold prices have risen from a near five-month low of
$1,235.92 touched earlier this month, as the dollar weakened
after the U.S. Federal Reserve kept its outlook for three rate
rises in 2018 unchanged and as investors remained divided over
the impact of U.S. tax reform on economic growth.             
            
    "Investors across the United States are sceptical about the
future prospects of the economy as tax overhaul is expected to
create a further deficit of $6 trillion and tensions have been
rising over North Korea's nuclear and missile programs," said
Sugandha Sachdeva, vice president of metals, energy and currency
research at Religare Securities Ltd.
    Gold is used as an alternative investment during times of
political and financial uncertainty.
    "Furthermore, dollar index treading water...is keeping
prices buoyant. These all have worked in favour of the beaten
down asset and the current backdrop has actually turned bullish
for the yellow metal," Sachdeva said.
    A weaker dollar makes greenback-denominated gold cheaper for
holders in other currencies.
    Among other precious metals, silver        was 0.4 percent
higher at $16.75 an ounce after earlier marking its highest
level since late November at $16.78. 
    Palladium        was up 0.5 percent at $1,065.50 an ounce,
touching its highest since February 2001 at $1,069.50 an ounce
in the previous session. 
    Platinum        was up 0.5 percent at $921.10.

 (Reporting by Apeksha Nair and Nallur Sethuraman in Bengaluru;
Editing by Michael Perry and Biju Dwarakanath)
  
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