December 27, 2017 / 10:42 AM / 8 months ago

PRECIOUS-Gold rises on weakening dollar, palladium hits 17-year peak

    * Dollar retreats against the euro, lifting gold
    * Palladium hits near 17-year high, eyes Feb. 2001 peak
    * GRAPHIC-2017 asset returns: tmsnrt.rs/2jvdmXl

 (Updates prices; adds comment, NEW YORK dateline, byline)
    By Chris Prentice and Jan Harvey
    NEW YORK/LONDON, Dec 27 (Reuters) - Gold rose for an eighth
straight session on Wednesday as a weaker U.S. dollar encouraged
investors to buy, and palladium hit another near 17-year peak on
expectations of strong demand and short supplies.
    Spot gold        was up 0.37 percent at $1,287.98 per ounce
by 2:32 p.m. EST (1932 GMT) after touching its highest in almost
a month at $1,288.50 an ounce. 
    Strong chart signals and a retreat in the dollar are
boosting gold, said Phillip Streible, a senior market strategist
for RJO Futures in Chicago.
    The dollar was down against the euro. Traders said there was
little news to support the euro's rise, though some investors
have positioned for a possible strengthening in the single
currency going into the new year, following a stellar 2017, its
best year versus the greenback since 2003.       
    The greenback's decline bolsters bullion and other
dollar-traded commodities, making them less expensive to holders
of other currency.
    The 50- and 200-day moving averages for U.S. gold futures
       for February delivery crossed on Tuesday, creating a
bullish "golden cross" formation and lending support in
Wednesday's trade, Streible said.
    The most active U.S. gold         futures for February
delivery settled up 0.3 percent at $1,291.40 per ounce. 
    Gold is up 10 percent this year, on track for its biggest
annual rise since 2010. Weakness in the dollar, concerns over
North Korea's nuclear program, and receding expectations that
U.S. interest rates would be raised quickly all boosted bullion.
    "We may try to test the waters around $1,300," said Afshin
Nabavi, head of trading at MKS in Switzerland. "There seems to
be a bit of physical interest coming from the Chinese side as we
approach the (Lunar) New Year in February. I wouldn't be
surprised if this buying continues."
    Other traders said the metal is now hitting some resistance
around key chart levels. 
    Among other precious metals, palladium        touched its
highest since February 2001 at $1,069.50 an ounce, just $5.50 an
ounce from that month's peak, and was up 1.05 percent at
$1,062.50.
    Palladium is the best performer of the precious metals
complex in 2017, up more than 50 percent as years of deficit and
expectations for rising demand from the car industry bolstered
the investment case for the autocatalyst metal. 
    "Investors perceive the market to be very tight," INTL
FCStone said in a note.        
    Silver        was almost 1 percent higher at $16.69, after
reaching its highest since late November at $16.723. Platinum
       was up 0.24 percent at $920.65 after touching $927.20,
the highest since Dec. 5.

 (Additional reporting by Apeksha Nair and Nallur Sethuraman in
Bengaluru; Editing by Mark Potter, Louise Heavens and Jeffrey
Benkoe)
  
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