December 6, 2017 / 11:17 AM / 10 months ago

PRECIOUS-Gold hovers near two-month lows as dollar firms

    * Silver hits 4-1/2-month low
    * Platinum hits 4-1/2-month low
    * GRAPHIC-2017 asset returns:
    * SPDR gold holdings down 0.17 pct at 845.47 tonnes

 (New throughout, updates prices, market activity and comments,
adds second byline and NEW YORK dateline)
    By Renita D. Young and Zandi Shabalala
    NEW YORK/LONDON, Dec 6 (Reuters) - Gold dipped slightly and
held near a two-month low on Wednesday, under pressure from a
firmer U.S. dollar ahead of a vote on the U.S. tax reform plan,
but a potential government shutdown lent support to prices.
    Spot gold        was down 0.1 percent at $1,264.57 an ounce
by 1:41 p.m. EST (1841 GMT). A day earlier, it hit its weakest
since Oct. 6.
    U.S. gold futures for February delivery         edged higher
to settle up $1.20, or 0.1 percent, at $1,266.10 per ounce. 
    The dollar        hit a two-week high against a basket of
currencies on optimism about progress on U.S. tax legislation.
    A stronger greenback makes dollar-priced assets like gold
more expensive for holders of other currencies.
    The U.S. Senate will vote on Wednesday on whether to send
its tax legislation to a conference to hammer out differences
with the U.S. House of Representatives' version of the plan.
    Gold was pressured by the view, reinforced by a Reuters poll
of economists, that the U.S. Federal Reserve is almost certain
to raise interest rates next week.             
    The price of gold had not fully reflected expectations of a
U.S. rate rise next week and in 2018 and therefore, gold could
ease further in the short term, said Dominic Schnider at UBS
Wealth Management in Hong Kong.
    Gold is highly sensitive to rising U.S. rates, as these lift
the opportunity cost of holding non-yielding bullion while
boosting the dollar.
    A possible U.S. government shutdown "should be positive for
gold but that could be temporary because no one really expects
the U.S. to default," said Capital Economics commodities
economist Simona Gambarini.
    Meanwhile, holdings in the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust      , fell on Tuesday.
    But November global holdings of gold-backed ETFs showed they
rose by 9.1 tonnes to 2,357 tonnes, with net inflows coming
entirely from Europe as the dollar fell, the World Gold Council
    Among other precious metals, silver        fell 0.8 percent
at $15.97 an ounce, after hitting $15.88, its lowest since
    Silver broke below $16.00 for the first time in 4-1/2 months
on follow-through selling from the previous session, said John
Lawrence, senior metals trader for Heraeus Precious Metals in
New York.
    "Silver may test lower. More selling may come into the
market as silver follows gold and follows the industrial complex
    Platinum        eased 1.7 percent at $900.05 an ounce after 
touching its lowest since July 11 at $895. Palladium        rose
1.2 percent at $994.40 an ounce.

 (Additional reporting by Apeksha Nair in Bengaluru; editing by
David Evans and David Gregorio)
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