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PRECIOUS-Gold hits 1-wk high; Fed chair pick in focus
November 2, 2017 / 4:02 AM / 21 days ago

PRECIOUS-Gold hits 1-wk high; Fed chair pick in focus

    * Dollar pulls back from 3-1/2-month high versus the yen
    * Investors also awaiting unveiling of Trump tax plan
    * Spot gold may break a resistance at $1,283/oz- technicals
    * GRAPHIC-2017 asset returns: tmsnrt.rs/2jvdmXl

 (Recasts, updates prices)
    By Arpan Varghese
    Nov 2 (Reuters) - Gold rose to a one-week high on Thursday
amid a weaker dollar, on increased demand from Chinese retail
investors and as the market waited for the announcement of a new
chair of the U.S. Federal Reserve, expected later in the day.
    Spot gold        was up 0.3 percent at $1,278.10 per ounce
at 0617 GMT, after earlier rising to $1,281.43, the highest
since Oct. 26.
    U.S. gold futures         edged up 0.1 percent to $1,278.80
per ounce.
    "The return of Chinese investor interest in gold at these
levels is a welcome vote of confidence for long-suffering gold
bulls," said Jeffrey Halley, a senior market analyst with OANDA.
    Higher demand from Chinese retail buyers has raised domestic
bullion prices and global prices have risen to narrow the gap,
he said.
    U.S. President Donald Trump is expected on Thursday to
nominate Jerome Powell as the next head of the Fed, putting his
own stamp on the leadership of the U.S. central bank while
signalling continuity on monetary policy.             
    "A lot of the focus is on the Fed chair, and Trump's
expected nomination of Jerome Powell," said OCBC analyst
Barnabas Gan.
    "The current movement in prices is not really about him
(Powell) being hawkish or dovish, but more so about market
uncertainty about what his nomination would mean."
    The dollar pulled back from a 3-1/2-month high versus the
yen and also fell against the euro, sagging ahead of a U.S. tax
bill that will be unveiled after a one-day delay.              
            
    The Fed kept interest rates unchanged on Wednesday and
pointed to solid U.S. economic growth and a strengthening labour
market while playing down the impact of recent hurricanes, a
sign it is on track to lift borrowing costs again in December.
            
    "Right now, we see prices supported above $1,270 until
perhaps a week from now. But beyond that, when the Fed meets in
December, we expect one more rate hike," OCBC's Gan said.
    "On that note, we are still bearish on gold and expect
prices to touch $1,250 at year-end, underpinned by the rate
hike."
    Gold is highly sensitive to rising U.S. interest rates, as
these lift the opportunity cost of holding non-yielding bullion,
while boosting the dollar, in which it is priced.
    Spot gold may break a resistance at $1,283 per ounce, and
rise into a range of $1,289 to $1,295, said Reuters technical
analyst Wang Tao.             
    Silver        prices edged up 0.1 percent to $17.13 per
ounce.
    Platinum        inched up 0.1 percent to $931.70, while
palladium        eased 0.2 percent to $1,000.00.

 (Reporting by Arpan Varghese in Bengaluru; Editing by Christian
Schmollinger and Biju Dwarakanath)
  

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