February 14, 2018 / 4:36 AM / 5 months ago

PRECIOUS-Gold hits 1-week high on weaker dollar ahead of U.S. data

    * Spot gold may edge up into $1,343-$1,352 range -
technicals
    * U.S. inflation data due 1330 GMT
    * SPDR Gold holdings rise 0.36 pct on Tuesday

 (Updates prices)
    By Eileen Soreng
    Feb 14 (Reuters) - Gold prices rose for a third straight
session on Wednesday to hit a one-week high, buoyed by a weaker
dollar, while investors awaited U.S. inflation data for clues on
the pace of future U.S. interest rate increases. 
    Spot gold        was up 0.2 percent at $1,332.01 an ounce,
as of 0745 GMT. Earlier in the session, it hit $1,336.86, its
highest since Feb. 6.
    U.S. gold futures         rose 0.3 percent to $1,334.7 per
ounce.
    The dollar index        was down 0.1 percent against a
basket of currencies at 89.590, after touching a one-week low of
89.378.       
    A retreat in the greenback helped the bullion - which is
priced in dollars - gain over 2 percent from a one-month low of
$1,306.81 hit last week. 
    "With the U.S. dollar once again striking a bearish chord,
the long gold set up looks favourable," said Stephen Innes, head
of trading APAC at OANDA.
    "However, with nearly 100 percent of gold appeal trading off
the back of U.S. dollar weakness, the U.S. CPI (consumer price
index) reading could be a day of reckoning for gold bulls,"
Innes added.
    The market on Wednesday looked forward to U.S. inflation
report for the month of January, due for release later in the
day, which could soothe, or incite, concerns of faster rate
hikes globally.
    Inflation can boost demand for safe-haven assets such as 
bullion, which tends to gain in times of crisis. However,
expectations that the U.S. Federal Reserve will hike interest
rates to fight inflation make the non-yielding metal less
attractive.
    "Recent price action is indicative of short-term
positioning, with expectations of strength toward $1,335 -
$1,340 as short positions are further tested," MKS PAMP Group
trader Sam Laughlin said.
    "The caveat to a short-term push higher, however, is the
upcoming Chinese New Year holiday, which will remove physical
demand from the market."
    Spot gold is expected to edge up into a range of
$1,343-$1,352 per ounce, as suggested by a retracement analysis,
Reuters technical analyst Wang Tao said.         
    Meanwhile, holdings of SPDR Gold Trust      , the world's
largest gold-backed exchange-traded fund, rose 0.36 percent to
823.66 tonnes on Tuesday, following their worst weekly fall
since July 30. 
    Among other precious metals, silver        rose 0.3 percent
to $16.59 per ounce. Platinum        was up 0.2 percent at
$976.10, while palladium        gained 0.2 percent to $986.49
per ounce.

 (Reporting by Eileen Soreng in Bengaluru,; Editing by Sherry
Jacob-Phillips and Biju Dwarakanath)
  
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