July 9, 2018 / 4:34 AM / in 13 days

PRECIOUS-Gold prices hit two-week high on short covering, weaker dollar

    * Dollar falls to lowest since June 14
    * Spot gold hits highest since June 26
    * Gold may rise into $1,268-$1,277/oz - technicals
    * Silver, platinum, palladium at over one-week highs

 (Adds details and updates prices)
    By Karen Rodrigues
    BENGALURU, July 9 (Reuters) - Gold prices hit a near
two-week high on Monday as investors covered their short
positions and the dollar slipped to its weakest since mid-June,
while lingering U.S.-Sino trade tensions also supported the
bullion.
    Spot gold        was up 0.5 percent at $1,260.41 an ounce,
as of 0708 GMT, after touching its highest since June 26 at
$1,262.06.
    U.S. gold futures         for August delivery were 0.5
percent higher at $1,261.70 an ounce.
    Gold is pushing higher on the dollar's weakness in Asian
trading, said Tim Brown, trader at MKS PAMP Group, wrote in a
note.
    The dollar index       , which measures the greenback
against a basket of six major currencies, slipped to an over
three week low after U.S. jobs data showed slower-than-expected
wage growth.       
    The U.S. economy created more jobs than expected in June,
but steady wage gains pointed to moderate inflation pressures
that should keep the Federal Reserve on a path of gradual
interest rate increases this year.             
    A weak U.S. dollar makes greenback-denominated gold cheaper
for holders of other currencies.
    "Some short covering has likely ensued given certainties
over the U.S.-Sino trade tensions on Friday. Still, the uptick
in risk appetite into the week may be short-lived if more trade
tariff threats are seen into the week ahead," said OCBC analyst
Barnabas Gan.
    The United States and China exchanged the first salvos in
what could become a protracted trade war on Friday, slapping
tariffs on $34 billion worth of each others' goods and giving no
sign of willingness to start talks aimed at a reaching a truce.
             
    President Donald Trump said on Thursday the United States
may ultimately impose tariffs on more than a half-trillion
dollars' worth of Chinese goods.             
    "With the ongoing U.S.-Sino trade tensions, the resignation
of David Davis will likely be a side-show, though it may raise
some concerns amongst market-watchers depending on how the
overall Brexit issue progresses," OCBC's Gan added.
    Brexit Secretary Davis resigned because he was not willing
to be "a reluctant conscript" to Prime Minister Theresa May's
plans to leave the European Union, delivering a blow to the
British leader struggling to end divisions among her ministers.
            
    Spot gold may rise into a range of $1,268-$1,277 per ounce,
as it has cleared a resistance at $1,257, Reuters technicals
analyst Wang Tao said.         
    Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, fell 0.15 percent to 802.24
tonnes on Friday.          
    Among other precious metals, silver        rose 0.7 percent
at $16.11 an ounce and palladium        was 0.6 percent higher
at $958.22 an ounce. Both the metals hit their highest since
June 27, during the session.
    Platinum        gained 1.7 percent to $854.70 per ounce,
after earlier touching its highest since June 28 at $855.10 an
ounce.

 (Reporting by Karen Rodrigues in Bengaluru; editing by Richard
Pullin, Subhranshu Sahu and Gopakumar Warrier)
  
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