November 22, 2017 / 10:47 AM / in 23 days

PRECIOUS-Gold jumps as dollar sinks on weak U.S. data, Fed minutes

    * Gold extends gains, up more than 1 percent
    * Fed meeting minutes say "near term" rate hike
    * Weak U.S. data, technicals also push dollar lower

 (Recasts, updates headline, prices; adds new comment)
    By Renita D. Young and Peter Hobson
    NEW YORK/LONDON, Nov 22 (Reuters) - Gold prices rose on
Wednesday as the dollar fell on technical factors and weak U.S.
economic data, and gold jumped more after the U.S. Federal
Reserve released minutes of its latest meeting, hinting at an
interest rate increase in the near future.
    Gold's gains accelerated after the Fed minutes, as the
dollar fell to a two-month low versus the Japanese yen, a
one-month low against the Swiss franc and its lowest since Oct.
20 against a basket of currencies.                    
    Spot gold        was up 1.1 percent at $1,293.92 ounce by
2:40 p.m. EST (1940 GMT). U.S. gold futures for December
delivery         settled up $10.50 an ounce, or 0.8 percent, at
$1,292.20 per ounce.
    Weak U.S. data also pressured the dollar. New orders for
U.S.-made capital goods unexpectedly fell in October after three
straight months of strong gains and a measure of goods orders
that strips out volatile components had its biggest drop since
September 2016.             
    The Fed minutes, published at 2 p.m. EST (1900 GMT), showed
policymakers expect interest rates will have to be raised in the
"near term."             
    "There weren't any surprises within the Fed minutes," said
Michael Matousek, head trader at U.S. Global Investors in San
Antonio. He said he expected gold to come under pressure
eventually when the Fed does raise interest rates.
    "You can expect to see the incremental seller of gold, who
is walking the fine line between balancing the portfolio
allocation and interest rate expectation."
    Rising rates tend to boost the dollar, making gold more
expensive for holders of other currencies. Rising bond yields
also reduce the appeal of non-yielding gold.
    "Firmer core inflation readings in the year ahead should
push the 10-year Treasury yield higher," said Nick Exarhos,
senior economist at CIBC World Markets in Toronto.
    Investors were keen to own gold to hedge against risks
including a fall in global stock markets from current record
highs, Saxo Bank analyst Ole Hansen said, predicting gold would
rise to $1,325 by the end of the year. {MKTS/GLOB]
    However, rising U.S. interest rates through next year were
likely to strengthen the dollar and put pressure on gold, said
Julius Baer analyst Carsten Menke.
    On the technical side, gold broke through resistance at the
50-day moving average around $1,286, analysts at ScotiaMocatta
said in a note. 
    Silver        was up 1.3 percent at $17.15 an ounce.
    Platinum        was up 0.8 percent at $940.90 an ounce and
palladium        was up 0.8 percent at $1,005.20 an ounce, after
touching $1,007.20, its highest since Nov. 10.

    
 (Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by Andrew Heavens, James Dalgleish and David Gregorio)
  

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below