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PRECIOUS-Gold rises to 2-week high in light trade after holiday
December 27, 2016 / 8:16 PM / a year ago

PRECIOUS-Gold rises to 2-week high in light trade after holiday

* Specs cut net longs in COMEX gold for 6th straight week
    * Platinum snaps six session decline
    * Silver notches biggest daily gain in nearly three weeks
    * Palladium clocks biggest daily gain in over a month

 (Updates prices)
    By Devika  Krishna Kumar and Swati Verma
    NEW YORK/BENGALURU, Dec 27 (Reuters) - Gold prices rose on
Tuesday to a near two-week high on weak Japanese inflation data,
but trading was thin with traders in the United States returning
after the long Christmas weekend and London markets still
    Most analysts believe broad concerns about European banks
and uncertainty around U.S. President-elect Donald Trump's
policies will likely support gold prices in 2017.
    However, the price of gold could tumble over the near term
if U.S. bond yields continue to climb, they said.
    Markets including the U.K., Australia, New Zealand and
Canada were closed for the holidays on Tuesday.
    Spot gold was up 0.5 percent at $1,139.42 an ounce by 2:48
p.m. EST (1948 GMT) after hitting its highest since Dec. 14 at
$1,148.98 an ounce. 
    U.S. gold futures ended the session 0.45 percent
higher at $1,138.80 per ounce.
    Data showed Chinese industry racked up its strongest profit
growth in three months in November, suggesting the world's
second-largest economy was improving. In Japan, however, core
consumer prices fell in annual terms for the ninth month as
household spending slumped. 
    "Maybe a top is in on Japan's growth and with that you could
start to see stimulus measures and that's why gold and silver
ticked up," said Phillip Streible, senior commodities broker for
RJO Futures in Chicago.
    "I think with gold, we can realistically get back up to
$1,250 an ounce in 2017," Streible said, adding that equity
markets were possibly due for a correction.
    Equity markets in the U.S. were higher on Tuesday, with the
Dow Jones Industrial Average resuming its climb towards 20,000
and the Nasdaq hitting a record. 
    Gold's gains were limited by a strong dollar.  
    The dollar rose against the yen and euro after
stronger-than-expected U.S. housing data and expectations for a
hawkish Federal Reserve. 
    The U.S. currency surged to a 14-year high against a basket
of major currencies earlier this month after the Federal
Reserve boosted the number of projected interest rate hikes for
2017. A firm dollar curbs demand for commodities priced in the
greenback by making them more expensive for holders of other
    "People are waiting until Trump becomes the U.S. president
and until we see his real policies or what he will do when he
takes office," said Yuichi Ikemizu, head of commodity trading at
Standard Bank in Tokyo.
    "People are just watching the other markets like dollar and
stock markets and kind of expecting the stock market and
financial market to be good under Trump government. In that
case, people don't need gold and instead invest in stocks."
    Among other precious metals, spot silver was up 1.6
percent at $15.965 an ounce.
    Platinum gained 1.3 percent to $900 per ounce,
snapping six straight sessions of losses. Palladium rose
2.8 percent to $674.4 an ounce, on track for its biggest one-day
rise in more than a month.

 (Reporting by Devika Krishna Kumar in New York and Swati Verma
in Bengaluru; Editing by Meredith Mazzilli and Chizu Nomiyama)

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