November 28, 2017 / 5:02 AM / a year ago

PRECIOUS-Gold inches lower; Fed chair hearing, U.S. tax reforms in focus

    * U.S. tax reform vote in Senate possibly later this week
    * Specs cut long positions in COMEX gold, silver in Nov. 21
    * Spot gold may seek a support around $1,292/oz - Technicals

 (Updates prices)
    By Vijaykumar Vedala
    Nov 28 (Reuters) - Gold prices edged lower on Tuesday but
held not far off a six-week high hit in the previous session, as
investors awaited a confirmation hearing for U.S. Federal
Reserve chair nominee Jerome Powell and a possible Senate vote
on U.S. tax reforms.
    Spot gold        was down 0.1 percent at $1,293.83 an ounce,
as of 0739 GMT. In the previous session, the metal touched a
high of $1,299.13 an ounce, its highest since Oct. 16.        
    U.S. gold futures         dipped 0.1 percent to $1,293.20. 
    In remarks prepared for his Tuesday hearing released by the
Fed, Powell defended the central bank's use of broad
crisis-fighting powers positioning himself as an extension of
the central bank policies of current Chair Janet Yellen and her
predecessor Ben Bernanke.             
    "His (Powell's) decisions on rates are suggested to be
almost indistinguishable from those of his predecessor, but I
would not be surprised if in the next few months we see him
taking a dovish path," ActivTrades chief analyst Carlo Alberto
de Casa said. 
    "I don't think he will push to raise rates too much, but
will instead monitor U.S. inflation and the job market."
    Gold is highly sensitive to rising rates, which lift the
opportunity cost of holding non-yielding assets such as bullion,
while boosting the dollar, in which it is priced. 
    The dollar held steady versus the yen on Tuesday and held
above a two-month low, with the near-term focus on a possible
Senate vote on a U.S. tax plan later in the week.
    "It will keenly watched particularly the details of the
cuts. There is a risk it could be slightly watered down than
what was originally proposed by (President Donald) Trump," ANZ
analyst Daniel Hynes said.  
    Reports suggesting that North Korea may be preparing for
another ballistic missile launch could spur some safe haven
buying, analysts said.            
    "I suppose it is probably the one thing which could
instigate a rally through $1,300. Otherwise, it is going to be
the U.S. dollar which drives trade for the moment," ANZ's Hynes
    Speculators cut their net long positions in COMEX gold and
silver contracts in the week to Nov. 21, U.S. Commodity Futures
Trading Commission (CFTC) data showed on Monday. Speculators cut
their net long position in gold by 3,944 contracts to 177,066
contracts in the week.             
    Spot gold may seek a support around $1,292 per ounce, and
then resume its rally towards a resistance at $1,301, according
to Reuters technical analyst Wang Tao.            
    Meanwhile, silver        was up 0.1 percent at $17.038 an
ounce, platinum        gained 0.2 percent to $948.70, while
palladium        slipped 0.4 percent to $1,003.00.

 (Reporting by Vijaykumar Vedala in Bengaluru; Editing by
Richard Pullin and Sherry Jacob-Phillips)
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