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PRECIOUS-Gold steadies on prospect of imminent U.S. rate rises
March 13, 2017 / 10:42 AM / 8 months ago

PRECIOUS-Gold steadies on prospect of imminent U.S. rate rises

    * Focus on Wednesday's election in the Netherlands
    * U.S. Fed rate rise on Wednesday priced in
    * Spotlight on Fed statement and news conference

 (Updates prices; adds comment, second byline, NEW YORK
    By Marcy Nicholson and Pratima Desai
    NEW YORK/LONDON, March 13 (Reuters) - Gold prices were
little changed on Monday as the prospect of imminent interest
rate rises kept them near the five-week lows touched last week,
while elections in Europe created uncertainty and fueled
investor buying.
    Spot gold        was down 0.01 percent at $1,204.30 an ounce
by 3:08 p.m. EST (1908 GMT). That compares with $1,194.55 last
Friday, its lowest level since Jan. 31. U.S. gold futures
        settled up 0.1 percent at $1,203.10.
    Investors are focusing on Wednesday's Dutch elections. The
chance of a eurosceptic party coming to power in the Netherlands
is seen as small but a strong election performance could fuel
speculation of a surprise result in French presidential
elections in April and May.            
    Wednesday is also the second day of the U.S. Federal
Reserve's two-day meeting. The widely expected decision to raise
rates could boost the U.S. currency, which when it rises makes
dollar-priced commodities more expensive for non-U.S. firms.
    "A rate rise from the Fed is pretty much priced in, we're
probably going to see two more hikes this year," said Oxford
Economics analyst Daniel Smith. "A period of higher rates will
tend to mean pressure on gold prices."
    The statement from the Fed, due to be released Wednesday at
2 p.m. (1800 GMT) followed by a briefing at 1830 GMT, will be
scrutinized for any changes in thinking among policymakers. 
    "Now, the debate shifts to Fed dots," said Wayne Gordon,
analyst for UBS Wealth Management, retaining a long view and
target price for gold at $1,300 per ounce.
    "Some see the dots rising, and this week's quarterly Fed
projections show a median of four. But we believe this year's
dots will remain unchanged at three," he said, referring to the
Fed policy-makers' forecasts that will be issued on Wednesday. 
    Traders said gold would have to close above $1,209, the
55-day moving average, to make further headway on the upside.
Downside support remains at the psychological level of $1,200 an
    Recent selling by investors can be seen in the holdings of
SPDR Gold Trust      , the world's largest gold-backed
exchange-traded fund, which fell 1.06 percent to 825.22 tonnes
on Friday.          
    Hedge funds and money managers also slashed their net long
positions in COMEX gold from the highest in three months in the
week to March 7, U.S. Commodity Futures Trading Commission data
showed on Friday.             
    Silver        slid 0.6 percent to $16.92 an ounce, platinum
       lost 0.5 percent to $937.25 an ounce and palladium       
rose 0.95 percent to $750.75 an ounce. 

 (Additional reporting by Nallur Sethuraman in Bengaluru;
Editing by Greg Mahlich and Chizu Nomiyama)

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