August 18, 2017 / 7:53 PM / 10 months ago

PRECIOUS-Gold near flat after surging to 9-month high on geopolitical worries

    * Trump fires controversial strategist Bannon
    * Spot gold largely flat for the week
    * Palladium touches 16-year high

 (Updates prices, Adds comments, milestones, background, NEW
YORK dateline)
    By Devika  Krishna Kumar and Zandi Shabalala
    NEW YORK/JOHANNESBURG, Aug 18 (Reuters) - Gold prices were
little changed after jumping to their highest in more than nine
months on Friday as the dollar retreated on political
uncertainty in the United States and a suspected Islamist
militant attack in Spain boosted bullion's safe-haven appeal.
    Spain mounted a sweeping anti-terrorism operation on Friday
after a suspected militant drove a van into crowds in Barcelona,
killing 13 people in what police suspect was one of a planned
wave of attacks.             
    Spot gold        touched its highest since Nov. 9 at
$1,300.80 per ounce, and was up 0.03 percent at $1,287.95 an
ounce by 3:20 p.m. EDT (1920 GMT). 
    Pressuring gold, however, was the latest high-level shake up
at the White House. U.S. President Donald Trump on Friday fired
Stephen Bannon as his chief strategist, removing a powerful and
controversial figure known for far-right political views.
    U.S. stocks rebounded in a volatile session on Friday, while
the dollar cut losses and bond yields rose to session highs
after the news.             
    "The ouster of White House chief strategist Steve Bannon,
who had been vilified perhaps more than anyone in the executive
branch since Dick Cheney, put a tenuous floor on the stumbling
stock market and blunted gold's charge above $1,300," said Tai
Wong, director of base and precious metals trading for BMO
Capital Markets in New York.
    "Gold and silver finish the day and the week largely
unchanged looking for direction."
    Markets were also uncertain about Trump's ability to push
ahead with policies after the disbandment of two high-profile
business advisory councils over his remarks on violence at a
rally in Virginia last weekend.             
     U.S. gold futures         for December delivery settled at
    "The recent soft patch in U.S. data has put serious doubts
over whether there will be another rate hike coming from the Fed
this year," said Fawad Razaqzada, analyst at
     "Unfortunately next week's economic calendar is quite
light. Thus, the dollar may weaken further, especially against
perceived safe haven currencies like the Japanese yen and Swiss
franc, and potentially gold and silver."
    Policymakers in Europe and the U.S. expressed concerns about
unwinding monetary stimulus too soon.                           
    Gold is sensitive to rising interest rates because they push
up bond yields, increasing the opportunity cost of holding
non-yielding bullion while tending to strengthen the dollar, in
which gold is priced.
    Spot gold faces resistance at $1,291 an ounce and could
hover below this level or retrace towards support at $1,271
again, said Reuters technical analyst Wang Tao.             
    Among other precious metals, silver        climbed 0.2
percent to $17.03 an ounce, having touched a two-month high of
    Platinum        was up 0.7 percent at $979.60, while   
Palladium        touched a fresh 16-year high of $934 before
giving back some gains to trade 0.3 percent lower at $923.35.
Palladium notched its second straight week of gains. 

 (Additional reporting by Apeksha Nair and Arpan Varghese in
Bengaluru; editing by David Evans and Chizu Nomiyama)
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