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PRECIOUS-Gold hits highest in over a month on weaker dollar, Brexit concerns
January 10, 2017 / 3:35 AM / 8 months ago

PRECIOUS-Gold hits highest in over a month on weaker dollar, Brexit concerns

* Brexit worries stoke safe-haven demand for gold
    * SPDR Gold holdings down about 15 pct since U.S. elections
    * Platinum, palladium off highs hit Monday

 (Adds comment, updates prices)
    By Swati Verma
    BENGALURU, Jan 10 (Reuters) - Gold rose to its highest in
over one a month on Tuesday, buoyed by a weaker U.S. dollar and
as fears that Britain will not have a clean break with the
European Union stoked safe-haven buying.
    Spot gold was up half a percent at $1,187.01 an ounce
by 0620 GMT, after reaching its highest since Dec. 5 at
$1,187.61 earlier in the session.
    U.S. gold futures climbed 0.2 percent to $1,187.20
per ounce.
    "The comments on the UK around Brexit that impacted the
pound saw some safe-haven buying," said ANZ analyst Daniel
Hynes.
    The pound slid on Tuesday after weekend comments from
British Prime Minister Theresa May sparked talk that Britain
would drastically rework trade relations with the EU after
Brexit.  
    Hynes added that gold was also getting support from strong
physical buying in China ahead of the Lunar New Year later this
month, although he said the longer term price outlook would
likely be tepid. 
    "The precious metal has got plenty of headwinds in the
medium-term. We are not expecting to see any particular upside
to the rally we have seen in the past weeks. The outlook for
rate hikes in the U.S. will be the biggest driver of gold prices
in 2017," Hynes added.
    Gold is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding the non-yielding
asset while boosting the dollar, in which it is priced.
    The dollar index, which measures the greenback
against a basket of currencies, was down 0.3 percent at 101.66
on Tuesday.
    "With volumes currently soft and market positioning
lightened, gold should continue to push higher and test a move
back above $1,200 over the short term," said MKS PAMP Group
trader Sam Laughlin.
    Focus is turning towards a news conference on Wednesday when
U.S. President-elect Donald Trump may give more details on
policies that could be implemented after he takes office on Jan.
20.
    "As Trump's inauguration date nears, we suspect gold
investors will monitor political developments more closely. Any
significant ratcheting higher in geopolitical tensions could
help trigger safe-haven bullion demand," HSBC analyst James
Steel wrote in a note.
    Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, fell 1.06 percent to 805.00
tonnes on Monday. The holdings have dropped about 15 percent
since the November U.S. Presidential elections. 
    Silver was up 0.5 percent at $16.64 an ounce and
platinum was 0.4-percent higher at $977.90. Platinum rose
to a two-month high of $981.90 an ounce in the last session.
    Palladium was set to gain for the sixth straight
session, up 0.1 percent at $759 an ounce after rising to its
highest in more than a month on Monday.

 (Additional reporting by Nallur Sethuraman in Bengaluru;
Editing by Joseph Radford)

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