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PRECIOUS-Gold steady, supported by North Korea tensions and Fed rate outlook
September 6, 2017 / 4:31 AM / in 3 months

PRECIOUS-Gold steady, supported by North Korea tensions and Fed rate outlook

    * Spot gold may retest resistance at $1,345/oz -technicals
    * Dovish Fed comments weigh on dollar

 (Updates prices)
    By Apeksha Nair
    Sept 6 (Reuters) - Gold prices held steady on Wednesday,
supported by geopolitical tensions over North Korea and
expectations that low inflation in the United States could delay
another interest rate hike there.
    Spot gold        was nearly unchanged at $1,338.10 per ounce
by 0641 GMT, after touching its highest since September 2016 in
the previous session.
    U.S. gold futures         for December delivery edged
0.1-percent lower to $1,343.40.
    "We're being driven by headlines and a weaker dollar and not
necessarily by fundamental reasons, so I'm a little cautious of
these levels," said Jeffrey Halley, a senior market analyst at
OANDA.
    "I think headlines regarding the Korean peninsula could
cause short-term spikes but it wouldn't surprise me if gold ran
out of a bit of momentum."
    A top North Korean diplomat on Tuesday warned that his
country was ready to send "more gift packages" to the United
States as world powers struggled for a response to Pyongyang's
latest nuclear weapons test.              
    The dollar edged down against the yen on Wednesday, pushed
back toward a recent 4-1/2-month low by the simmering tensions
over North Korea and by comments from a Federal Reserve official
about subdued U.S. inflation.       
    Fed policymakers signalled caution on weak inflation and a
few backed delaying further interest rate hikes.              
    Higher interest rates tend to boost the dollar and push up
bond yields, putting pressure on gold prices by increasing the
opportunity cost of holding non-yielding bullion.
    Spot gold may retest resistance at $1,345 per ounce, a break
above which could lead to a gain to the next resistance level at
$1,350, said Reuters technical analyst Wang Tao.             
    "The technical picture is extremely overbought. We could see
a correction to the downside, possibly back almost towards the
$1,300-1,310 level," said OANDA's Halley.
    "I suspect that people are bullish on gold, but they don't
really want to buy it at these levels. So, I expect any dips to
be met with quite a lot of buying now."
    Among other precious metals, silver        and platinum
       were both 0.1 percent lower at $17.87 an ounce and
$1,005.05 an ounce.
    Palladium        was up 0.7 percent at $964.50.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Kenneth
Maxwell and Joseph Radford)
  

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