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9 months ago
PRECIOUS-Gold edges lower as equities, dollar gain
October 14, 2016 / 3:47 AM / 9 months ago

PRECIOUS-Gold edges lower as equities, dollar gain

3 Min Read

* Spot gold seen in $1,250-$1,266 range - technicals
    * SPDR Holdings rise 0.3 pct on Thursday
    * Palladium touches new three-month low
    * Markets await Janet Yellen's speech for rates clues

 (Adds comment, updates prices)
    By Swati Verma
    BENGALURU, Oct 14 (Reuters) - Gold edged lower on Friday as
stocks firmed and the U.S. dollar rose on expectations the
Federal Reserve would raise interest rates by the end of the
year.
    Spot gold was down 0.2 percent at $1,255.50 an ounce
by 0715 GMT. The metal was on track to end the week mostly flat.
    U.S. gold futures fell 0.1 percent at $1,256.80 an
ounce.
    "People are happy to buy at these levels. But, there are a
lot of expectations of a Fed rate hike in December, which will
be bearish for gold," said Ronald Leung, chief dealer, Lee
Cheong Gold Dealers in Hong Kong.
    There will also be some uncertainty going into the
elections, said Leung adding that if Democratic presidential
candidate Hillary Clinton wins over Republican Donald Trump then
the dollar could strengthen and pull gold down. 
    Spot gold may consolidate further in a narrow range of
$1,250-$1,266 per ounce for one day before falling to the Oct. 7
low of $1,241.20, according to Reuters technical analyst Wang
Tao. 
    Markets will next look to Friday's U.S. retail sales data
and remarks from Fed Chair Janet Yellen, who will address a
Boston Fed economics conference at which Boston Fed governor
Eric Rosengren will also speak.
    "We think its (Federal Reserve's) rate hiking trajectory
will remain very much intact," INTL FCStone analyst Edward Meir
said in a note.
    "As a result, the dollar will likely push higher going into
year-end, offering gold its most formidable headwind and even
countering the impact of weaker equities."
    The dollar index, which measures the greenback
against a basket of six major currencies, gained 0.4 percent to
97.877. 
    Asian stocks bounced on Friday, erasing some losses from the
previous day. Global equity markets had slumped to a three-month
low on Thursday. 
    "Physical demand and geopolitical risk may be the main
supporting planks of the gold market going forward," HSBC
analyst James Steel wrote in a note.
    Holdings of the SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, rose 0.28 percent to 961.57
tonnes on Thursday. 
    Among other precious metals, silver slipped 0.2
percent to $17.42 an ounce. The metal was on track for its third
consecutive weekly loss.
    Platinum was down for a fifth straight session as it
fell 0.4 percent to $932.49 an ounce. The white metal is down
over 3 percent this week.
    Palladium was steady at $637.75 after having touched
a new three-month low of $633.22 an ounce. The metal is down
over 4 percent this week.

 (Reporting by Swati Verma and additional reporting by Nallur
Sethuraman in Bengaluru; Editing by Christian Schmollinger and
Subhranshu Sahu)

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