October 30, 2017 / 2:47 PM / in 2 months

PRECIOUS-Gold rises ahead of bumper week for central bank news

    * Gold higher anticipating central bank meetings this week
    * Trump to name Fed chair, with Powell tipped for post
    * Indictment of Trump ex-campaign manager pressures dollar
    * GRAPHIC-2017 asset returns: tmsnrt.rs/2jvdmXl

 (Recasts, updates prices; adds comment, NEW YORK dateline)
    By Renita D. Young and Jan Harvey
    NEW YORK/LONDON, Oct 30 (Reuters) - Gold rose on Monday
ahead of a series of central bank meetings and  U.S. President
Donald Trump's expected announcement of the next Federal Reserve
chair, and amid a slightly weaker U.S. dollar.
    The metal is facing a slew of potential risks this week,
including a two-day U.S. Federal Reserve policy meeting, U.S. 
payrolls data on Friday and ongoing unrest in Spain's Catalonia
region.             
    “Gold has been more of a safe-haven investment, because of
risks involved in diversifying European assets," said John
Lawrence, senior metals trader for Heraeus Precious Metals in
New York.
    Spot gold        was up 0.3 percent at $1,275.76 an ounce by
2:52 p.m. EDT (1852 GMT), little changed from its late Friday
level but well off that session's three-week low of $1,263.35.
U.S. gold futures        for December delivery settled up $5.90,
or 0.5 percent, at $1,277.70 per ounce. 
    The Bank of Japan and Bank of England also meet this week to
consider  interest rate policies. 
    Gold is highly sensitive to rising rates, which increase the
opportunity cost of holding non-yielding bullion. Tighter U.S.
policy also boosts the dollar, in which the metal is priced.
    While the dollar index        has taken a step lower on
Monday, it remains close to its highest since mid July.         
    U.S. politics, including the indictment of former Trump
campaign manager Paul Manafort, pressured the dollar.
            
    Fed governor Jerome Powell, considered a moderate, is widely
tipped to take over from Janet Yellen when she steps down as Fed
chair in February.                 
    Trump has said he has been considering Powell and Stanford
University economist John Taylor for the post and has also not
ruled out re-nominating Yellen. 
    "The front end of the U.S. rates curve doesn't seem to have
priced in a Taylor Rule Fed ... which means that a surprise
would send yields and the dollar higher, and risk assets down,"
SG Forex said in a note on Monday.
     "The market thinks Jerome Powell, more neutral in the
market's mind, is more likely."
    Speculators cut their bullish COMEX gold bets by 1,968
contracts to 173,043 contracts, U.S. Commodity Futures Trading
Commission (CFTC) data showed on Friday, the fewest since early
August.               
    Among other precious metals, silver        up 0.04 percent
at $16.817 an ounce. Platinum        was down 0.16 percent at
$913 an ounce, while palladium        was down 0.1 percent at
$964.50 an ounce.

    
 (Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by Alexander Smith and Steve Orlofsky)
  

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