June 16, 2014 / 3:45 AM / 5 years ago

PRECIOUS-Gold hits 3-week high on Iraq; platinum group metals up

* Gold climbs to highest since late May
    * Prices to gain more this week -analyst
    * Platinum, palladium gain ahead of outcome of wage talks

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, June 16 (Reuters) - Gold hit its highest in
nearly three weeks on Monday, as turmoil in Iraq supported the
metal's safe-haven appeal, while platinum group metals gained
ahead of the outcome of wage talks to end a five-month long
strike in South African mines.
    Spot gold rose 0.5 percent to $1,282.50 an ounce by
0632 GMT, after hitting $1,283.70 earlier in the session - the
highest since late May. 
    Sunni insurgents seized a mainly ethnic Turkmen city in
northwestern Iraq on Sunday after heavy fighting, solidifying
their grip on the north after a lightning offensive that
threatens to dismember Iraq. 
    Gold is seen as a safe-haven asset at times of geopolitical
uncertainty. 
    "Gold is expected to climb this week as the situation in
Iraq remains volatile," said Howie Lee, an analyst with Phillip
Futures.
    "At its current level of $1,282, gold appears to have plenty
of upside before facing heavy resistance," Lee said, adding that
immediate resistance is expected at $1,292.
    Data from the Commodity Futures Trading Commission on Friday
showed that investor sentiment towards gold was turning
positive. Hedge funds and money managers increased their bullish
bets in gold futures and options in the week to June 10, their
first increase in five weeks. 
    Other traders warned that this week's Federal Reserve policy
meeting could bring caution to any rally in gold.  
    The Fed will conclude a policy meeting on Wednesday, with
markets watching out for any signals on when the U.S. central
bank might begin hiking interest rates. 
    Among other precious metals, platinum and palladium
 gained about 1 percent each on Monday after logging sharp
declines last week on easing supply worries.
    The leader of South Africa's AMCU union said on Friday a
wage deal with the top three platinum producers was imminent,
signalling a possible end to a crippling five-month strike that
has disrupted global output of the metal. 
               
    PRICES AT 0632 GMT
 Metal            Last      Change  Pct chg
                                           
 Spot gold          1282.5       6     0.47
 Spot silver         19.77    0.11     0.56
 Spot platinum     1438.74   14.44     1.01
 Spot palladium        818       9     1.11
 Comex gold         1282.7     8.6     0.67
 Comex silver       19.775    0.12     0.61
 Euro               1.3541                 
 DXY                80.559                 
                                           
 COMEX gold and silver contracts show the
 most active months
 
 (Editing by Ed Davies and Muralikumar Anantharaman)
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