February 12, 2018 / 4:40 AM / 9 months ago

PRECIOUS-Gold rises on weaker dollar ahead of U.S. data

    * Spot gold seen in $1,325-$1,330/oz resistance zone -
Technicals
    * Palladium off 3-1/2-month lows hit in previous session
    * Traders await U.S. consumer price data due Wednesday

 (Updates with latest prices)
    By Nithin ThomasPrasad
    Feb 12 (Reuters) - Gold prices rose on Monday as the U.S.
dollar slipped after last week's rally though investors are
watching for inflation data from the United States later this
week for signs of the intensity of expected U.S. interest rate
increases. 
    Spot gold        was up 0.6 percent at $1,323.63 per ounce,
as of 0722 GMT. Last week, the precious metal fell 1.2 percent
for its second consecutive weekly decline. 
    U.S. gold futures         for April delivery rose 0.8
percent to $1,325.60 per ounce.
    "Gold has picked up a little in the last 24 hours, as a hint
of dollar weakness creeps back into markets," said Jordan
Eliseo, chief economist at gold trader ABC Bullion.
    The dollar index, a measure of the greenback against a
basket of six major currencies, dropped 0.38 percent to 90.096
      . Last week the index rose 1.4 percent because of a flight
to safer assets amid a rout in global equity markets.    
    A weaker greenback makes dollar-denominated gold less
expensive for holders of other currencies.
    U.S. consumer price data will be released on Wednesday that
should give clearer signs on the pace of inflation and with it
the frequency of the anticipated interest rate rises. Concerns
of rising inflation triggered the global equity drop last week.
            
    "After last week's sell off in risk assets, we expect gold
to be well supported, especially if volatility in financial
markets persists," Eliseo said.
     Last week, the benchmark S&P 500        fell 5.2 percent,
its biggest decline since January 2016. 
    "The uptick in prices today is not so much safe-haven
buying, but more so potential short covering behaviour by market
watchers," said OCBC analyst Barnabas Gan.
    "It's just common sense for some portfolio managers to
exhibit some short-covering behaviour especially after the
sell-off we saw last week."
    Gold prices slipped 2.5 percent in the prior two weeks
before Monday. 
    Hedge funds and money managers slashed their net-long
position in COMEX gold for the first time in eight weeks in the
week to Feb. 6, and cut it in silver, U.S. Commodity Futures
Trading Commission data showed on Friday.        
    Spot gold is expected to end its current bounce in a
resistance zone of $1,325 to $1,330 per ounce and then revisit
its Feb. 8 low of $1,306.81, said Reuters technical analyst,
Wang Tao.         
    In other precious metals, silver        gained 0.8 percent
to $16.48 per ounce.
    Platinum        rose 0.6 percent to $970.10 per ounce. On
Friday, it fell to $953 an ounce, the lowest since Jan. 10.    
    Palladium        was up 1.2 percent at $985.97 per ounce. In
the previous session, it touched its lowest since Oct. 25.

 (Reporting by Nallur Sethuraman and Nithin Prasad in Bengaluru,
Editing by Christian Schmollinger and Sherry Jacob-Phillips)
  
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