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PRECIOUS-Gold rebounds from 6-wk low as dollar sags ahead of Yellen speech
June 27, 2017 / 4:51 AM / 3 months ago

PRECIOUS-Gold rebounds from 6-wk low as dollar sags ahead of Yellen speech

    * Yellen due to speak in London on Tuesday
    * Spot gold may retrace toward $1,172 in three months
-technicals
    * Platinum also bounces off six-week low

 (Adds comment, updates prices)
    By Nithin ThomasPrasad
    BENGALURU, June 27 (Reuters) - Gold rose on Tuesday to
recover from its lowest level in nearly six weeks, supported by
a softer dollar ahead of a speech later in the day by Federal
Reserve Chair Janet Yellen for clues on whether the U.S. will
keep raising rates this year.
    Fed officials have signalled they will look through a
slowdown in inflation and continue on their current trajectory
of interest rate hikes. But investors are sceptical and market
pricing shows only a 40 percent chance of a rate hike at the
Fed's December meeting.
    Yellen is scheduled to take part in a discussion on global
economic issues at London's British Academy. Ahead of that, the
dollar        slipped 0.5 percent against major currencies.
       
    She will likely reiterate the central bank's positive views
about the U.S. economy and the Fed's stance of raising interest
rates once more this year, said OCBC analyst Barnabas Gan. 
    Spot gold        had risen 0.6 percent to $1,251.84 per
ounce at 0844 GMT. It dropped to $1,236.46 on Monday, its
weakest since May 17.
    The precious metal slid 1 percent in the previous session as
a large sell order hit sentiment, though losses were limited by
political uncertainty around the world.             
    U.S. gold futures         for August delivery rose 0.5
percent to $1,252.20 an ounce.        
    "Around the time London came in there was some decent buying
seen through COMEX. The market consequently sharply rose through
$1,247 all the way to $1,252 in a matter of seconds, as stops
were tripped," MKS PAMP trader Alex Thorndike said in a note.   
    "We are still keeping an eye out on geopolitical tensions,
gold thrives in uncertainty and increased uncertainty in the
near term should actually push gold prices up," said OCBC's Gan.
    Allegations of ties to Russia have cast a shadow over U.S.
President Donald Trump's first five months in office, while the
British government's looming Brexit talks are also fueling
concern about global stability.
    Tensions also rose as the U.S. Supreme Court on Monday
handed a victory to Trump by reviving parts of a travel ban on
people from six Muslim-majority countries.               
    Spot gold may drop back toward $1,172 in three months, as
suggested by its wave pattern and a Fibonacci retracement
analysis, according to Reuters technical analyst Wang Tao.
            
    Among other precious metals, silver        rose 0.8 percent
to $16.68 an ounce. Palladium        climbed 0.4 percent to
$868.25 per ounce. 
    Platinum        rose 1.1 percent to $922.90 per ounce,
recovering from Monday's six-week trough.      

 (Reporting by Nithin Prasad and Vijaykumar Vedala in Bengaluru;
Editing by Joseph Radford)
  

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