May 9, 2018 / 4:16 AM / 2 months ago

PRECIOUS-Gold prices dip as dollar rises on higher U.S. Treasury yields

    * Dollar gains vs yen as 10-year U.S. yield edges near 3 pct
    * Safe-haven buying of gold not as strong as expected
-analyst
    * Spot gold may revisit May 1 low of $1,301.51/oz
-technicals

 (Adds comment, updates prices)
    By Apeksha Nair
    BENGALURU, May 9 (Reuters) - Gold prices fell to their
lowest in almost a week on Wednesday, as the dollar strengthened
after U.S. President Donald Trump's decision to pull the United
states out of the Iran nuclear deal boosted oil prices and
pushed Treasury yields higher.             
    Raising the risk of conflict in the Middle East, upsetting
European allies and casting uncertainty over global oil
supplies, Trump said he would reimpose U.S. economic sanctions
on Iran that had been lifted under the 2015 agreement.
            
    The dollar rose against the yen as oil prices climbed to a
3-1/2-year high, pushing yields on the benchmark 10-year
Treasury note             closer to 3 percent.      
    Spot gold        had fallen 0.65 percent to $1,305.16 an
ounce by 0713 GMT, its lowest since May 3. 
    U.S. gold futures         for June delivery were down 0.6
percent at $1,305.70 per ounce. 
    "(Gold is) stuck between rising geopolitical risks and the
stronger U.S. dollar. The safe-haven buying certainly hasn't
been as strong as we thought it might have been following
Trump's announcement," said ANZ analyst Daniel Hynes.   
    During times of political or economic uncertainty, gold
prices often receive a boost as the metal is widely considered a
safe-haven asset alongside the Japanese yen.
    "An escalation (in tensions) in the Middle East will create
volatility in the financial markets and as such healthier
conditions for the safe-haven asset," Benjamin Lu, commodities
analyst at Singapore-based broker Phillip Futures, said in a
note.
    Meanwhile, Trump and Chinese President Xi Jinping discussed
ongoing trade issues on Tuesday, as both sides continue to
position themselves amid a heated feud over tariffs between the
world's two largest economies.             
    Spot gold may revisit its May 1 low of $1,301.51 per ounce
as it failed three times to break resistance at $1,317, said
Reuters technical analyst Wang Tao.              
    In other precious metals, silver        slipped 0.4 percent
to $16.36 an ounce, while platinum        fell 0.4 percent to
$908.60 an ounce.
    Palladium        edged down 0.1 percent to $968.50 an ounce.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Biju
Dwarakanath and Joseph Radford)
  
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