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PRECIOUS-Gold inches up from eight-week low as dollar slides
May 10, 2017 / 3:49 AM / 5 months ago

PRECIOUS-Gold inches up from eight-week low as dollar slides

    * Dollar index down 0.2 percent
    * Trump fires FBI director, igniting political firestorm
    * Concerns about possible North Korean missile test revive

 (Updates prices)
    By Swati Verma
    BENGALURU, May 10 (Reuters) - Gold prices edged up on
Wednesday from an eight-week low hit the session before, with
the dollar slipping after U.S. President Donald Trump abruptly
dismissed FBI Director James Comey.
    Spot gold       , which is priced in dollars, was up 0.1
percent at $1,221.47 per ounce at 0715 GMT. In the previous
session, it dropped below its 100-day moving average to its
lowest since March 15 at $1,213.81.
    "We think that gold's slide could perhaps extend to $1,180
to $1,200, an area of good technical support," said INTL FCStone
analyst Edward Meir. 
    "At that point, we should see some decent buying set in, as
a roughly 10-percent correction from the highs should make
holding the precious metal a more attractive risk-reward
proposition."
    U.S. gold futures         climbed 0.4 percent to $1,221.50
an ounce.
    The dollar slid on Wednesday and the perceived safe-haven
yen gained after Trump fired Comey in a move that shocked
Washington.                    
    Rekindled fears that North Korea could be gearing up for
another weapons test also supported gold.
    In an interview with Sky News on Tuesday, Pyongyang's
ambassador to the United Kingdom, Choe Il, said North Korea is
ready to conduct a sixth nuclear test. Observers of that country
have said such a test was likely, but his comments reminded
markets that tensions could escalate on the recently calm Korean
peninsula.             
    However, expectations of U.S. monetary policy tightening
next month dragged on bullion prices.
    Prices have fallen about $75 per ounce since hitting a
five-month high of $1,295.42 in mid-April.
    "Gold has lost its appeal as a safe-haven ... markets are
refocusing on the growth momentum in the U.S. and prospects of
future rate hikes. With French elections over now, there are not
many geopolitical risks," Argonaut Securities analyst Helen Lau
said.
    Interest rate increases could dent demand for non-interest
bearing gold, while gold is also used as an alternative
investment during times of political and financial uncertainty.
    Interest rate futures implied traders saw close to a
90-percent chance the Federal Reserve would raise interest rates
at its June 13-14 policy meeting, according to CME Group's
FedWatch tool.
    In other precious metals, silver        was up 0.1 percent
at $16.15 an ounce. In the previous session, it fell to its
weakest since Jan. 3 at $16.01.
    Platinum        gained 0.2 percent to $902.80, while
palladium        was down 0.3 percent at $793.52 an ounce. 

 (Reporting by Swati Verma in Bengaluru; Editing by Joseph
Radford and Sherry Jacob-Phillips)
  

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