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PRECIOUS-Gold prices dip on nerves before Fed chair decision
October 24, 2017 / 10:17 AM / a month ago

PRECIOUS-Gold prices dip on nerves before Fed chair decision

    * Market focus turns to Fed leadership
    * Gold seen consolidating at $1,275-$1,285 -trader
    * Palladium expected to keep outperforming -analyst

 (Updates prices; adds comment, NEW YORK dateline)
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, Oct 24 (Reuters) - Gold prices dipped on
Tuesday as investors anxiously awaited news on the next head of
the U.S. Federal Reserve, while strong share markets and a
calmer geopolitical environment sapped safe-haven demand. 
    "People are going into the equity markets and taking off
their safe-haven plays," said Phillip Streible, senior market
strategist at RJO Futures in Chicago. 
    Gold futures may remain weak until Friday’s U.S. gross
domestic product figures are released, he added.
    Spot gold        down 0.4 percent at $1,276.73 an ounce by
2:28 p.m. EDT (1828 GMT), after hitting its lowest since Oct. 6
at $1,271.86 in the previous session.
    U.S. gold futures         for December delivery settled down
$2.60, or 0.2 percent, at $1,278.30 per ounce. 
    Spot gold has shed 6 percent since touching a one-year high
of $1,357.54 on Sept. 8, largely due to a rebound in the dollar
on expectations that the Fed will boost interest rates in
December.
    "We'll probably consolidate around $1,275-$1,285 until some
Fed news comes out," said a Hong Kong-based trader.
    U.S. President Donald Trump told reporters on Monday he was
"very, very close" to making his decision on who should chair
the U.S. central bank.                 
    "If a hawkish candidate is chosen, gold futures would most
likely come under renewed pressure," Streible said.
    A hawkish candidate would be expected to favor higher
interest rates, boosting the value of the dollar and making
greenback-denominated gold more expensive for holders of other
currencies. 
    The Fed is expected to raise rates in December and twice
next year, according to a Reuters poll of economists, who now
worry that the central bank will slow its tightening because of
expectations that inflation will remain low.                 
    MSCI's 47-country world share index                 hovered
near its recent all-time highs after a drop in General Electric
shares on Wall Street had seen the ViX volatility index       
spike up.             
    Silver        fell 0.6 percent to $16.94 an ounce, after
hitting its lowest since Oct. 9 in the previous session.
    Platinum        was up 0.4 percent at $924.40 an ounce while
palladium        was up 0.60 percent at $965 per ounce.
    "I think there's still belief in the market that palladium
can continue to outperform," said Ole Hansen, head of commodity
strategy at Saxo Bank in Copenhagen.
    "If we see the (palladium-platinum) spread widen above $50
then we could probably see another extension up towards the $75
area." 
    Palladium has more than doubled in value since touching a
5-1/2-year low in January last year while platinum has gained
only 15 percent in the same period. 

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

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