November 14, 2017 / 4:36 AM / a year ago

PRECIOUS-Gold prices slip as higher U.S. yields weigh on market

    * Spot gold may break support at $1,274 per ounce -
    * Speculators raise long Comex gold position for 1st time in
8 wks
    * Palladium recovers after hitting lowest since Nov. 1

 (Recasts first graph, updates prices)
    By Vijaykumar Vedala
    Nov 14 (Reuters) - Gold prices inched down on Tuesday, hurt
by higher U.S. Treasury yields amid uncertainty over the outlook
for tax reforms in the United States.
    Higher U.S. bond yields can pressure gold prices as they
reduce the appeal of non-yielding bullion.  
    Investors will keep an eye on an European Central
Bank-hosted conference in Frankfurt on Tuesday, where ECB chief
Mario Draghi, U.S. Federal Reserve Chair Janet Yellen, Bank of
Japan Governor Haruhiko Kuroda and Bank of England head Mark
Carney will form an all-star panel.            
    Spot gold        was down 0.1 percent at $1,276.26 per ounce
at 0754 GMT. U.S. gold futures         for December delivery
fell 0.2 percent to $1,276.50.
    "Gold prices continued to trade in a very tight range as
investors await cues from global markets," ANZ said in a note. 
    "Rising bond yields and the lack of progress of U.S. tax
reforms have seen investors move to the sidelines in the gold
    U.S. Treasury two-year note yields hit a fresh nine-year
high on Monday, as the yield curve resumed its flattening and
investors priced in a 25-basis-point interest rate hike by the
Federal Reserve in December.              
    Meanwhile, Congressional Republicans pushed ahead on Monday
on a U.S. tax code overhaul as a Senate panel considered the
issue, but risks lay ahead with major intraparty disputes
unsettled and President Donald Trump returning soon from Asia as
the debate heats up.                
    "There is not much speculative interest (in gold) this
morning. The U.S. treasury bond yields are also putting some
pressure (on prices)," said a Hong Kong-based trader.
    Spot gold may break support at $1,274 per ounce and fall to
the next support level at $1,263, as suggested by a wedge and a
Fibonacci ratio analysis, according to Reuters technical analyst
Wang Tao. 
    Hedge funds and money managers raised their net long
position in COMEX gold by 7,027 contracts to 173,562 contracts 
in the week to Nov. 7, U.S. Commodity Futures Trading Commission
(CFTC) data showed on Monday.                
    That marked the first time speculators had raised their net
long position in eight weeks.
    In wider markets, the dollar index       , which tracks the
U.S. currency against a basket of six major rivals, slipped 0.1
percent, while sterling steadied after a recent slide, which
followed concerns about Theresa May's ability to stay on as
British prime minister.                   
    Among other precious metals, silver        fell 0.1 percent
to $17.03 per ounce, while platinum        was nearly unchanged
at $931.60. 
    Palladium        recovered from near two-week lows hit
earlier in the session and was up 0.6 percent at $996.10 an

 (Reporting by Vijaykumar Vedala in Bengaluru; Editing by Biju
Dwarakanath and Joseph Radford)
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