May 24, 2018 / 4:03 AM / 6 months ago

PRECIOUS-Gold prices hold gains in wake of weaker dollar

    * Fed minutes depict a less aggressive rate hike approach
    * Dollar hits over one-week low vs yen  
    * Platinum to continue trading at discount to gold -analysts

 (Adds comment, updates prices)
    By Apeksha Nair
    BENGALURU, May 24 (Reuters) - Gold prices on Thursday held
gains from the previous session, buoyed as the dollar extended
losses after minutes of the latest U.S. Federal Reserve meeting
hinted at a dovish approach to interest rate hikes. 
    Spot gold        had edged up 0.1 percent to $1,293.93 per
ounce by 0612 GMT, after gaining nearly 0.2 percent in the
previous session.
    U.S. gold futures         for June delivery were up 0.3
percent at $1,293.30 per ounce.
    "The minutes had a little bit of an impact but not too much.
Gold is moving relative to the dollar," said Ronald Leung, chief
dealer at Lee Cheong Gold Dealers in Hong Kong.
    The dollar lost momentum versus the yen        and against
major rivals        on Thursday after the Fed's minutes were
seen as dovish and as U.S. President Donald Trump proposed
looking into imposing new tariffs on imported cars.       
            
    Although the central bank's minutes on Wednesday showed
another interest rate hike in the United States would be
warranted "soon", it also showed that the Fed would tolerate
inflation rising above its target for a time.             
    While higher U.S. rates tend to boost the dollar and drag on
greenback-denominated gold, the metal can be used as a hedge
against rising inflation.
    Meanwhile, the euro hovered near a six-month low against the
dollar, weighed down by concerns over economic slowdown in the
single currency bloc and political risks in Italy. Asian shares
were treading water as investors fretted about new setbacks in
U.S.-China trade talks.                                      
    Trump also said on Wednesday he would know next week whether
his summit with North Korean leader Kim Jong Un would take place
as scheduled, casting further doubts on plans for the
unprecedented meeting.             
    Gold is often seen as a safe investment during times of
political and financial uncertainty, alongside the Japanese yen.
    "With the trade picture looking increasingly cloudy ... we
could see further yen strengthening and equity weakness which is
typically bullish for gold," INTL FCStone analyst Edward Meir
said in a note.
    "A recovery back over the $1,300 per ounce mark could prompt
further short-covering," Meir added.    
    Among other precious metals, silver        was little
changed at $16.42 an ounce. Platinum        gained 0.7 percent
to $905.30 an ounce, while palladium        rose 0.2 percent to
978.40 an ounce.
    Analysts at Standard Chartered on Wednesday said they
expected platinum to continue to trade at a discount to both
palladium and gold this year.   

 (Reporting by Karen Rodrigues and Apeksha Nair in Bengaluru;
Editing by Sherry Jacob-Phillips and Joseph Radford)
  
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