October 9, 2017 / 12:57 PM / 9 months ago

PRECIOUS-Gold recoups previous week's losses as dollar eases

    * Specs cut net longs in gold and silver for 3rd week
    * China returns to market after Golden Week break
    * GRAPHIC-2017 asset returns: tmsnrt.rs/2jvdmXl

 (Updates prices; adds comment, second byline, NEW YORK
    By Marcy Nicholson and Jan Harvey
    NEW YORK/LONDON, Oct 9 (Reuters) - Gold prices rose on
Monday, erasing all of the previous week's losses, as a weaker
dollar and the resilience of a key chart level removed some
downward pressure, while the return of Chinese buyers to the
market also lent support.
    Prices bounced after falling for a fourth week to a
two-month low on Friday, following an upbeat reading of U.S.
wage growth and unemployment that supported expectations for a
U.S. interest rate hike in December, pushing the dollar and
Treasury yields higher.
    Gold's resilience above its 200-day moving average at $1,253
an ounce also provided some technical support. Meanwhile, the
dollar fell below a 10-week high, while geopolitical concerns
centered on North Korea and Spain supported gold prices.
    Spot gold        was up 0.6 percent at $1,283.16 an ounce by
2:33 p.m. EDT (1833 GMT), while U.S. gold futures        for
December delivery settled up 0.8 percent at $1,285.
    "I think it's mostly technical in nature," said Rob Haworth,
senior investment strategist at U.S. Bank Wealth Management,
adding that geopolitical concerns remain and are also
     Republican U.S. Senator Bob Corker warned in an interview
with the New York Times on Sunday that President Donald Trump
risked setting the nation "on the path to World War Three" with
reckless threats toward other countries.             
    Following data late Friday that showed speculators cut their
bullish stance in COMEX gold and silver contracts for the third
straight week, in the week to Oct. 3, Haworth said there was
room for them to take new long positions.        
    "For the time being, gold may have bottomed out," ABN Amro
analyst Georgette Boele said. "On Friday people were very
reluctant to buy dollars, even though there were enough signals
to do so ... and the dollar has come under some pressure again,
which is being reflected currently in gold."
    Expectations for a Fed rate hike, Boele added, are still
providing some headwinds to gold, which, as a non-yielding
asset, tends to suffer as interest rates rise. 
    China's central bank held off from adding to gold reserves
for an 11th straight month in September, data showed on Monday.
    On the physical markets, Chinese buyers returned after the
Golden Week holiday, another potentially supportive factor for
    Among other metals, silver        was up 0.7 percent at
$16.89 an ounce, while platinum        was up 0.3 percent at
$915.75 an ounce and palladium        was 0.8 percent higher at

 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
Greg Mahlich and Tom Brown)
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