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PRECIOUS-Gold climbs on weaker dollar, stumbling stocks
October 13, 2016 / 4:30 AM / a year ago

PRECIOUS-Gold climbs on weaker dollar, stumbling stocks

* Spot gold may fall to Oct. 7 low of $1,241.20 - techs
    * Palladium touches lowest in nearly 3 months
    * China Sept exports, imports both worse than expected

 (Adds comments, updates prices)
    By Swati Verma
    BENGALURU, Oct 13 (Reuters) - Gold edged up on Thursday on a
weaker dollar and as equities plunged on soft Chinese trade data
that stoked concerns about the health of the world's No.2
economy.
    The bullion rose even after minutes from a U.S. Federal
Reserve meeting last month signalled that the central bank could
raise interest rates in December.
    "Despite the FOMC minutes that were released overnight, gold
prices didn't really move. This strongly suggests that gold
prices at this juncture, of $1,250, have already digested the
probability of a rate hike around this year," said OCBC Bank
analyst Barnabas Gan.
    Gan added that various headwinds to the global economy would
buoy safe-haven demand for bullion, with the metal likely to
touch $1,300 by the year-end.
    Several voting Federal Reserve policymakers judged a rate
hike would be warranted "relatively soon" if the U.S. economy
continued to strengthen but doubts on inflation remained,
according to the minutes of the Fed's September policy meeting
released on Wednesday. 
    "Gold has been under pressure but we do not think the FOMC
minutes will add materially to the downwards slant of the
market," HSBC analyst James Steel wrote in a note.
    "But without further increases, some of the pressure on gold
may come off."
    Spot gold was up 0.3 percent at $1,257.95 an ounce by
0742 GMT, while U.S. gold futures advanced 0.5 percent
to $1,259.80 an ounce.
    "There is a lot of buying on the physical side in Asia,
mainly from China and buying from exchange-traded funds after
recent dips," said a precious metals trader with a China-based
bank.
    The dollar index, which measures the greenback
against a basket of six major currencies, was down nearly 0.1
percent at 97.924. 
    Asian stocks stumbled to three-week lows and U.S. stock
futures and Treasury yields fell after China's September trade
data showed a sharp decline in exports. 
    China's September exports dropped 10 percent from a year
earlier, far more than what markets had expected, while imports
unexpectedly shrank 1.9 percent after an encouraging bump up in
August, official data showed on Thursday. 
    Among other precious metals, silver gained 0.5
percent to $17.54 an ounce, while platinum shed 0.4
percent to $938.49 an ounce.
    Palladium was down 1.5 percent at $639.60 an ounce
after touching a low of $636.72, its weakest since July 18,
earlier in the session.

 (Reporting by Swati Verma and Nallur Sethuraman in Bengaluru;
Editing by Joseph Radford and Subhranshu Sahu)

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