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PRECIOUS-Gold hits 3-week low; Fed rate hike outlook weighs
September 21, 2017 / 1:09 AM / 2 months ago

PRECIOUS-Gold hits 3-week low; Fed rate hike outlook weighs

    Sept 21 (Reuters) - Gold fell to its lowest level in over
three weeks on Thursday as a stronger U.S. dollar and the
increasing likelihood of another Federal Reserve interest rate
hike this year curbed demand.
        
    FUNDAMENTALS    
    * Spot gold        was down 0.2 percent at $1,298.61 an
ounce at 0054 GMT, after earlier dropping to lowest since late
August at $1295.65. 
    * U.S. gold futures         for December delivery lost 1
percent to $1,302.10 an ounce.
    * The U.S. dollar shone while Asian shares slipped slightly
on Thursday after the U.S. Federal Reserve announced a plan to
start shrinking its balance sheet and signalled one more rate
hike later this year.            
    * The U.S. Federal Reserve left interest rates unchanged on
Wednesday but signaled it still expects one more increase by the
end of the year despite a recent bout of low inflation.
            
    * The Fed will reduce its bond holdings evenly across the
maturities of Treasury bonds and, on mortgage bonds, it will
continue to focus reinvestments on 15- and 30-year securities.
            
    * The Bank of Japan is expected to reassure markets on
Thursday that it will lag well behind its U.S. counterpart in
scaling back its massive stimulus, as an improving economy has
yet to boost inflation anywhere near its elusive 2 percent
target.             
    * The euro's appreciation reflects a stronger euro zone
economy, supporting calls for the European Central Bank to move
away from its unprecedented stimulus policy, ECB rate-setter
Klaas Knot said on Wednesday.             
    * The Bank of England will raise interest rates for the
first time in a decade at its next meeting, a Reuters poll of
economists showed on Wednesday, with a large majority saying
such a move would be a mistake.             
    * U.S. allies said on Wednesday that enforcing international
sanctions on North Korea, and not mere dialogue, was the key to
getting Pyongyang to give up its nuclear weapons.             
    
     DATA/EVENT AHEAD (GMT)
     1230  U.S.            Weekly jobless claims
     1230  U.S.            Philly Fed business index     Sep 
     1300  U.S.            Monthly home price index      Jul 
     1400  Euro zone       Consumer confidence flash     Sep 
     1400  U.S.            Leading index                 Aug 

 (Reporting by Apeksha Nair in Bengaluru; Editing by Richard
Pullin)
  

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