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PRECIOUS-Gold up, poised for more gains on soft U.S. rate outlook
July 17, 2017 / 10:28 AM / 5 months ago

PRECIOUS-Gold up, poised for more gains on soft U.S. rate outlook

    * Gold rises above 200-day moving average
    * Platinum rises to highest in more than four weeks
    * Dollar index at 10-month low

 (Updates prices; adds comment, byline, NEW YORK dateline)
    By Marcy Nicholson and Eric Onstad
    NEW YORK/LONDON, July 17 (Reuters) - Gold climbed on Monday
and was likely to see further gains after the dollar slumped to
multi-month lows on the back of data that pointed to weak U.S.
inflation and dampened prospects for rate hikes. 
    "The dollar continues to be on the back foot and yields have
dropped back somewhat from their relatively elevated positioning
lately," said analyst Jonathan Butler at Mitsubishi in London.
    Spot gold        was up 0.5 percent at $1,234.61 an ounce by
2:53 p.m. EDT (1853 GMT), while U.S. gold futures         for
August delivery settled up 0.5 percent at $1,233.70.
    "If gold remains at $1,230 or goes higher, there's an
elevated risk that some of those short positions might start to
be reversed and that would give some further upside to gold,"
Butler said. 
    Gold prices slightly pared gains as the U.S. dollar       
came off its lows after hitting its lowest level against a
basket of major currencies in 10 months as recent soft U.S.
inflation and domestic demand figures undermined arguments for
the Federal Reserve to raise interest rates.                    
    A weaker greenback supports gold since the dollar-priced
commodity is less expensive for investors holding other
currencies.
    "Investor sentiment (for gold) has improved quite
dramatically over the past week, especially with the weak data
out of the United States last week," said ANZ analyst Daniel
Hynes. "Gold is now primed for another rally."
    The day's move took spot gold above the 200-day moving
average near $1,230 per ounce.
    "The technical bounce looks fairly solid," Hynes said.
    Gold's performance, however, has been relatively
disappointing, said Joni Teves, strategist for UBS.
    "There are enough supportive factors currently and we think 
the downside has now likely been contained. But at the same
time, there is also a lack of catalysts strong enough to
encourage investors to chase gold higher here," Teves said in a
note.
    Among other precious metals, platinum        gained 0.9
percent at $923.74 per ounce after touching $934.40, the highest
since June 15.    
    Spot silver        rose 1.2 percent at $16.13 per ounce,
after hitting $16.19, the highest in nearly two weeks.
    Analysts polled by Reuters cut their average 2017 silver
forecast to $17.32 an ounce from $17.98 after the metal slid 9
percent in the second quarter.             
    Palladium        added 1 percent to $866.88 per ounce. 
    "We saw a triple bottom form in platinum last week along
with the lows of May and December. When that happens that tends
to be a pretty solid support level," Butler said.

 (Additional reporting by Arpan Varghese in Bengaluru; editing
by Louise Heavens and Marguerita Choy)
  

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