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PRECIOUS-Gold slips from 8-week highs on dollar recovery
January 18, 2017 / 4:03 AM / 8 months ago

PRECIOUS-Gold slips from 8-week highs on dollar recovery

* Trump's comments on dollar drive gold to 8-week peak
    * Silver slips, platinum down from more than 2-month highs
    * U.S. Federal Reserve's hawkish stance seen capping rally

 (Adds comment, updates prices)
    By Sethuraman N R
    Jan 18 (Reuters) - Gold prices on Wednesday fell from
eight-week highs hit in the previous session as the dollar
recovered from lows and investors booked profits ahead of Donald
Trump's inaguration as U.S. president later this week.
    Spot gold fell 0.3 percent to $1,212.43 per ounce by
0706 GMT. Bullion hit an eight-week high of $1,218.64 in the
previous session.
    U.S. gold futures fell 0.1 percent to $1,212 per
ounce.
    "After a quick push higher right on the open, gold succumbed
to some profit taking and producer selling throughout the
morning," MKS PAMP Group trader Alex Thorndike said.
    "A slight reprieve for the greenback also helped to soften
gold and silver."
    The dollar index, which measures the greenback
against a basket of currencies, rose 0.3 percent to 100.61. 
    In the previous session, it hit a low of 100.26, its weakest
since Dec. 8, following Trump's comments in the Wall Street
Journal that the strong greenback was "killing us."
    "Once Trump takes office and there is some clarity (on his
policies), the focus will come back to the fact Fed is going to
hike rates a number of times this year. That would reduce the
appeal of gold as an asset," Jeffrey Halley, senior market
analyst at brokerage OANDA in Singapore.
    Several Fed officials have been making a case for a gradual
hike in U.S. interest rates.  
    Fed Chair Janet Yellen will have an opportunity to lay out
her thinking with speeches on monetary policy on Wednesday and
Thursday this week.
    Higher interest rates would reduce demand for non-interest
bearing bullion holdings. 
    Trump's campaign calls for tax cuts and more infrastructure
spending have boosted U.S. shares and the dollar, as well as
driving a sell-off in Treasuries, but his protectionist
statements and off-the-cuff Tweets have led many investors to
opt for gold instead.
    Gold, considered a safe-haven investment during times of
geopolitical and financial uncertainty, has risen more than 8
percent since dropping to a more than 10-1/2-month-low in
December.
    Chinese President Xi Jinping offered a vigorous defence of
globalisation on Tuesday, pushing back against the "America
First" rhetoric of Trump and signalling Beijing's desire to play
a bigger role on the global stage. 
    "The extent to which globalization retreats and the mood and
sentiment coming out of Davos may impact gold. Clearly there is
enough investor concern to send gold higher," HSBC analyst James
Steel said in a note.
    Spot silver fell 0.3 percent to $17.11 an ounce, just
off a five-week high hit earlier in the day and in the prior
session. 
    Platinum dropped 0.1 percent to $973.15 an ounce,
while palladium fell 0.5 percent to $743.50.

 (Reporting By Nallur Sethuraman in Bengaluru; Editing by
Christian Schmollinger and Sonali Paul)

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