May 29, 2018 / 4:29 AM / 3 months ago

PRECIOUS-Gold prices ease as strong dollar weighs on market

 (Adds comments and details; updates prices)
    * Dollar near 6-1/2-month high
    * Italy concerns have minor impact on gold - analyst

    By Karen Rodrigues
    BENGALURU, May 29 (Reuters) - Gold prices slipped on Tuesday
as a buoyant dollar continued to weigh on the market amid
renewed hopes of a U.S.- North Korea summit.
    Spot gold        was 0.1 percent lower at $1,296.91 per
ounce at 0730 GMT, while U.S. gold futures         for June
delivery fell 0.6 percent to $1,296.40 per ounce.
    "There seems to be a lack of conviction in the market,
particularly after the North Korean summit... and that's come at
a time when we are looking at another rate hike in the U.S.,"
said ANZ analyst Daniel Hynes.
    Markets are awaiting U.S. inflation data due later this week
that could provide clues to future interest rate increases ahead
of the June Federal Reserve policy meeting. 
    Higher interest rates tend to boost the dollar, making
greenback-denominated gold more expensive for holders of other
currencies and denting its non-yielding appeal.
    "The yellow metal will look to consolidate above $1,300 to
resume a push higher, while down-side support sits around
$1,295," MKS trader Samuel Laughlin said in a note.
    The dollar       , which measures the greenback against a
basket of six major currencies, hit 94.518, its highest since
mid-November 2017.
    "The pressure seems to be building on gold bulls both from a
geopolitical standpoint as well as from the fact that the dollar
continues to strengthen against a number of foreign currencies,"
INTL FCStone analyst Edward Meir said in a note.
    On Monday, Trump and Japanese Prime Minister Shinzo Abe
discussed North Korea by phone and confirmed they would meet
before an expected U.S.-North Korea summit.             
            
    South Korean President Moon Jae-in said there could be more
impromptu talks and summits with North Korea's Kim Jong Un.
            
    Meanwhile, Italy's president set the country on a path to
fresh elections on Monday, appointing a former International
Monetary Fund official as interim prime minister with the task
of planning for snap polls and passing the next
budget.            
    "That (Italy concerns) is providing a little bit of support
but is a minor factor at the moment," Hynes said.
    In other precious metals, spot silver        was down 0.3
percent at $16.42 an ounce.
    Platinum        rose 0.3 percent to $904.10 an ounce and
palladium        slid 0.8 percent to $979.50 an ounce.

 (Reporting by Karen Rodrigues in Bengaluru; Editing by
Subhranshu Sahu)
  
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