* Markets expected to be quiet with China on holidays
* Spot gold seen in $1,319-$1,330 range - technicals
(Recasts lede, updates prices)
By Swati Verma
Sept 15 Gold prices slipped on Thursday after
breaking a five-day losing streak in the previous session, as
the dollar rose slightly and uncertain equity markets boosted
the metal's safe-haven appeal ahead of the U.S. Federal Reserve
meeting next week.
Asian stocks wavered as investors grappled with the
seemingly diminishing ability of major central banks to
stimulate growth, while a tumble in crude oil prices added to
the risk-aversion mood.
"While the market is predicting relatively low probability
for September hike, they now seem to be more convinced that a
December hike is highly probable," said NAB analyst Vyanne Lai.
"The market has been characterised by high volatility than
few weeks before... The general trend will be a downward one,"
said Lai, adding that prices would be below $1,300 by the end of
this year and reach $1,100 by the end of next year.
Spot gold had slipped 0.3 percent to $1,318.96 an
ounce by 0730 GMT, and U.S. gold futures were down 0.3
percent at $1,322.60 an ounce.
The dollar index, which measures the greenback
against a basket of six major currencies, was up 0.2 percent at
While U.S. interest rate futures indicate that expectations
of an actual rate increase next week remain low, the dollar
could get a lift from anything in the Fed's statement that hints
at a hike this year.
Gold is highly sensitive to rising rates, which lift the
opportunity cost of holding non-yielding assets such as bullion,
while boosting the dollar, in which it is priced.
"The gold market is on the defensive. It has remained under
pressure despite the clear and marked reduction in market
expectations of a U.S. rate hike later this month," said HSBC
analyst James Steel.
"The U.S. yield curve traded to its steepest in two months.
The drop in yields should have supported gold more than it did,
as arguably the dip in the dollar should have. This implies
there is more to gold's sluggishness."
Spot gold looks neutral in a range of $1,319-$1,330 per
ounce, and an escape could point a direction, according to
Reuters technical analyst Wang Tao.
With China's financial markets closed from Thursday through
Sunday for the Mid-Autumn Festival, the gold market is expected
to be quiet.
The Bank of England will be a focus on Thursday. The central
bank is seen standing pat after easing policy last month, amid
signs it overestimated the initial shock to Britain's economy
from June's Brexit vote.
Spot silver fell 0.3 percent to $18.88 an ounce.
Platinum was unchanged at $1,033 an ounce, while
palladium fell 0.3 percent to $652.10.
(Reporting by Swati Verma in Bengaluru; Editing by Richard
Pullin and Subhranshu Sahu)