October 19, 2017 / 10:47 AM / 2 months ago

PRECIOUS-Gold recovers from one-week low as dollar, equities sag

    * Dollar sags as Treasury yields slip back
    * World stocks stumble off all-time highs
    * Platinum, palladium hit more than one-week low

 (Adds comment, updates prices, adds New York dateline)
    By Renita D. Young and Maytaal Angel
    NEW YORK/LONDON, Oct 19 (Reuters) - Gold prices recovered on
Thursday from the more than one-week low they had reached
overnight as a rally in both the dollar and equities ran out of
steam, but the precious metal remained vulnerable to further
declines.
    The dollar index        fell against a basket of currencies
as 10-year Treasury yields             dropped.        
    Gold        was up 0.4 percent at $1,286.31 an ounce by 2:40
p.m. EDT (1840 GMT), after earlier hitting its lowest since Oct.
9 at $1,276.22. Gold has lost 6 percent since Sept. 8.
    U.S. gold futures         for December delivery settled up
$7, or 0.6 percent, at $1,290 per ounce, hitting $1,277.60, its
lowest since Oct. 6.
    U.S. jobless claims fell 9 percent during the week ended
Oct. 14 to 222,000 from 224,000, the U.S. Labor Department said
on Thursday.             
    World stock markets slipped from a record high on Thursday
after a flurry of tepid corporate earnings reports but were off
session lows as Wall Street pared losses, while demand for
safe-haven assets pushed U.S. Treasury yields lower.           
    "There's technical reasons why we've stabilized, stocks have
come off, (but overall) people are not finding much value
investing in gold at the moment," said Fawad Razaqzada, an
analyst at FOREX.com.
    "The lack of safe-haven demand combined with expectations of
higher interest rates is weighing. If gold remains below $1,300,
there's a risk of a deeper correction in the coming days or
weeks."
    Federal Reserve Chair Janet Yellen's current term ends in
February, and investors are waiting to see who U.S. President
Donald Trump will pick as her replacement. The White House said
a decision would be announced in coming days.             
    Higher interest rates typically boost the dollar and bond
yields, pressuring gold by increasing the opportunity cost of
holding non-yielding bullion.
    "Fundamentally, the U.S. economy is still doing well, but
the worry is that there is not much inflation in the system,"
said Ryan McKay, commodity strategist at TD Securities in
Toronto.
    "Without the inflation, the market is expecting that the Fed
won't raise rates three times in 2018, as the documents are
suggesting, and that would make it more bullish for gold."
    Canada's Bank of Nova Scotia          is exploring options
for its gold business ScotiaMocatta, including a possible sale
of the world's oldest gold trader, three sources familiar with
the matter said on Wednesday.             
    Silver        rose 1.24 percent at $17.19 an ounce, platinum
       rose 0.4 percent at $921.80 and palladium        was up
0.4 percent at $956 per ounce. 
    Platinum and palladium hit one-week lows overnight.

 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
Larry King and Lisa Shumaker)
  

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