June 28, 2017 / 11:08 AM / 3 months ago

PRECIOUS-Weaker dollar helps lift gold for second straight day

    * U.S. dollar lowest since November
    * Bond yields rise on Draghi comments
    * Gold hovers around 100-day moving average

 (Updates prices; adds comment, byline, NEW YORK dateline)
    By Marcy Nicholson and Peter Hobson
    NEW YORK/LONDON, June 28 (Reuters) - Gold prices rose on
Wednesday as the dollar weakened for a second straight day
following a global cyber attack and a delay to U.S. healthcare
legislation that fueled doubts about President Donald Trump's
ability to pass measures expected to boost the economy.      
                 
    The dollar sank to its lowest level since November while the
euro hit a one-year high after European Central Bank President
Mario Draghi on Tuesday appeared to hint that stimulus could be
trimmed this year, though sources later said he had been
misinterpreted.                     
    A weaker greenback makes dollar-denominated bullion cheaper
for holders of other currencies and can increase demand. 
    Spot gold        was up 0.2 percent at $1,249.20 an ounce by
2:09 p.m. EDT (1809 GMT). It was on track to close June down 1.5
percent, but for the second quarter finish little changed.
    U.S. gold futures         settled up 0.2 percent at
$1,249.10. 
    "For the remainder of this year we expect gold prices to
profit slowly but surely from a weaker U.S. dollar and to rise
at a modest pace," ABN Amro analyst Georgette Boele said. "Our
year-end forecasts for 2017 and 2018 are $1,300 and $1,400 per
ounce, respectively."
    While the weak greenback was seen giving support to gold
prices, rising yields on U.S. benchmark 10-year Treasury notes
were seen preventing stronger gains.
    The risk of a deeper stock market correction meant investors
now wanted to keep their gold, said Ole Hansen, head of
commodities strategy at Saxo Bank.
    "With the selling appetite fading, it gives some room to the
upside," he said.
    Stock investors were also on edge after U.S. Federal Reserve
Chair Janet Yellen said shares may be over-valued, Hansen said.
            
    However, bond yields rose after Draghi's comments on ECB
stimulus, limiting the appeal of non-yielding bullion.      
           
    On the technical side, gold rose above its 100-day moving
average. Fibonacci resistance was at $1,255.20, analysts at
ScotiaMocatta said in a note. 
    "Expect to see prices perking up heading into the latter
part of the week, especially if the combination of a weaker
dollar and U.S. equity markets stays with us for a little while
longer," said INTL FCStone analyst Edward Meir in a note.
    Spot silver        was up 0.9 percent at $16.81 an ounce.
    Platinum        was 0.5 percent higher at $921.30, and
palladium        was up 0.05 percent at $857.90.
    The platinum market was heading for a third year of global
surplus in 2017, consultancy CPM Group said in a report. It also
said a surplus was expected in the palladium market.
            

 (Additional reporting by Vijaykumar Vedala and Nithin Prasad;
Editing by Elaine Hardcastle and Leslie Adler)
  

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