May 14, 2018 / 1:07 AM / 2 months ago

PRECIOUS-Gold prices rise as U.S. rate hike view grounds dollar

    BENGALURU, May 14 (Reuters) - Gold prices rose on the back
of a subdued dollar on Monday as investors considered the
prospects of slower interest rate hikes in the United States. 
        
    FUNDAMENTALS  
    * Spot gold        rose 0.3 percent to $1,321.20 per ounce
at 0045 GMT, after marking the highest since April 26 at
$1,325.96 in the previous session.
    * U.S. gold futures         for June delivery were up about
0.1 percent at $1,321.50 per ounce.
    * The dollar index        eased 0.1 percent at 92.426, with
its recent rally running out of steam on the back of sagging
U.S. yields as investors wound back expectations that the
Federal Reserve will launch a series of quick rate hikes.       
    * U.S. import prices rose less than expected in April as a
rebound in the cost of petroleum products was tempered by a drop
in food prices, the latest indication that inflation pressures
were increasing moderately.             
    * St. Louis Federal Reserve Bank President James Bullard on
Friday spelled out the case against any further interest rate
increases, saying rates may already have reached a "neutral"
level that is no longer stimulating the economy.             
    * The euro zone needs a new, common "fiscal instrument" to
hold its member countries together even when they come under
attack in financial markets, European Central Bank President
Mario Draghi said on Friday.             
    * China's central bank will maintain its neutral monetary
policy and keep liquidity and credit growth largely steady while
keeping the yuan currency basically stable, it said on Friday.
            
    * The United States threatened on Sunday to impose sanctions
on European companies that do business with Iran, as the
remaining participants in the Iran nuclear accord stiffened
their resolve to keep that agreement operational.             
    * U.S. Secretary of State Mike Pompeo said on Sunday that
Washington would agree to lift sanctions on North Korea if the
country agrees to completely dismantle its nuclear weapons
program, a move that would create economic prosperity that "will
rival" that of South Korea.             
    * SPDR Gold Trust      , the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.62 percent to
857.64 tonnes on Friday from 862.95 tonnes on Thursday.
            
    * Hedge funds and money managers raised their net long
position in COMEX gold contracts in the week to May 8, U.S.
Commodity Futures Trading Commission (CFTC) data showed on
Friday.             

 (Reporting by Apeksha Nair in Bengaluru; editing by Richard
Pullin)
  
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