July 10, 2018 / 4:31 AM / 11 days ago

PRECIOUS-Gold prices inch down as dollar recovers from 3-week low

    * SPDR holdings decline to weakest since August
    * Speculators raise net longs in gold in week to July 3
    * Specs trim silver net longs to lowest since January

 (Recasts, adds comments, details and updates prices)
    By Karen Rodrigues
    BENGALURU, July 10 (Reuters) - Gold prices gave up early
gains to trade slightly lower on Tuesday as the U.S. dollar
recovered, while lingering U.S.-China trade worries and
political uncertainty over Brexit limited losses. 
    Spot gold        was down 0.1 percent at $1,256.79 an ounce,
as of 0709 GMT, after touching its highest since June 26 at
$1,265.87 in the previous session.
    U.S. gold futures         for August delivery were 0.2
percent lower at $1,257.40 an ounce.
    The main driver was the dollar, said National Australia Bank
economist John Sharma. 
    The dollar's index against a basket of six major currencies
       was up 0.04 percent at 94.114 after dropping to its
lowest since mid-June on Monday.       
    Investors were also on the sidelines awaiting developments
on the trade war between China and the United States, said Dick
Poon, general manager, Heraeus Metals Hong Kong Ltd.
    Last week, the world's top two economies slapped tit-for-tat
duties on $34 billion worth of each other's imports.
            
    "Geopolitical issues such as Britain's confused exit from
the European Union and U.S. President Trump's assertion that
China was impeding North Korean progress on denuclearisation
have provided some support for gold," said Sharma.
    Trump suggested on Monday that China might be seeking to
derail U.S. efforts aimed at denuclearising North Korea.
            
    Britain's ramshackle exit from the European Union could
damage economic growth in the euro zone, European Central Bank
policymaker Ewald Nowotny said.             .
    Prime Minister Theresa May's foreign minister and Brexit
negotiator quit on Monday in protest at her plans to keep close
trade ties with the European Union after Britain leaves the
bloc.             
    The departure of two key eurosceptic ministers raised
worries about a "hard Brexit".
    On the other hand, spot gold may drop to $1,247 per ounce,
as it has completed a bounce from the July 3 low of $1,237.32,
Reuters technicals analyst Wang Tao said.         
    Meanwhile, hedge funds and money managers raised their net
long position in COMEX gold by 105 contracts to 4,291 contracts
in the week to July 3, U.S. Commodity Futures Trading Commission
(CFTC) data showed on Monday.         
    Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, dropped 0.18 percent to 800.77
tonnes on Monday, its lowest since August 2017.           
    In other precious metals, silver        was up 0.1 percent
to $16.08 an ounce. 
    Platinum        slipped 0.3 percent to $844.50 per ounce and
palladium        fell 0.9 percent to $951.95 an ounce.

 (Reporting by Karen Rodrigues in Bengaluru, Editing by Sherry
Jacob-Phillips and Subhranshu Sahu)
  
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