July 10, 2018 / 10:46 AM / 11 days ago

PRECIOUS-Gold prices slip on stronger dollar; bullion seen re-testing low

 (Updates prices, headline; adds comment, second byline, NEW
YORK to dateline)
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, July 10 (Reuters) - Gold prices fell on
Tuesday, weighed down by a stronger U.S. dollar, and may re-test
a seven-month low after a failed attempt to break higher in the
previous session.
    Spot gold        was down 0.2 percent at $1,255.09 an ounce
by 1:33 p.m. EDT (1733 GMT), after retreating from its highest
since June 26 at $1,265.87 in the previous session.
    U.S. gold futures         for August delivery settled down
$4.20, or 0.3 percent, at $1,255.40 per ounce. 
    "If this dollar strength continues, we could see another
test of $1,240, the lows from last week and mid-December, a
crucial technical level," said Carsten Fritsch, commodity
analyst at Commerzbank in Frankfurt.
    Bullion has been on a downtrend since touching $1,365.23 on
April 11, then the strongest since Jan. 25.
    The dollar's index against a basket of six major currencies
       was up 0.33 percent at 94.386 after dropping to its
lowest since mid-June on Monday.       
    A stronger dollar makes greenback-denominated gold more
expensive for holders of other currencies.
    "Strong stocks, overseas buyers need dollars to pay for
stocks, so gold again becomes expensive," said George Gero,
managing director of RBC Wealth Management.
    Investors were also 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.
            
    "So far we have seen little to no impact on the gold market
because of the trade war, the only dominant story is the dollar
index," said Naeem Aslam, ThinkMarkets.com chief market analyst.
    Trump suggested on Monday that China might be seeking to
derail U.S. efforts aimed at denuclearizing North Korea.
            
    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.           
    "For gold to recover, we need to see the return of
investors, not only speculative but ETF investors,"
Commerzbank's Fritsch said. "We may have to wait until the
autumn until we see longer lasting increase in gold prices."
    Meanwhile, silver        fell 0.13 percent at $16.05 an
ounce. 
    Platinum        slipped 0.8 percent at $840.25 per ounce and
palladium        shed 2 percent at $941.25.
    Palladium may be forming an inverted head and shoulders
pattern, Stéphanie Aymes, head of technical analysis at Societe
Generale, said in a note. This pattern typically points to
higher prices.
    "The pattern's confirmation level stands at $1,043/47 and
therefore remains a prominent hurdle," she added.

 (Additional reporting by Karen Rodrigues in Bengaluru
Editing by David Evans and Cynthia Osterman)
  
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