April 19, 2018 / 5:08 AM / in 5 months

CORRECTED-PRECIOUS-Gold gains as metals rally sparks inflation concerns

 (Corrects to clarify gold rose for a fifth, and not fourth,
straight session in first paragraph)
    * Spot gold faces resistance at $1,356/oz -technicals
    * Higher base metal prices could boost inflation -analysts

    By Eileen Soreng
    BENGALURU, April 19 (Reuters) - Gold prices rose for a fifth
straight session helped by a rally in base metals that has
fuelled concerns of inflationary pressures, with lingering
U.S.-China trade tensions lending further support to the yellow
metal. 
    Spot gold        was up 0.2 percent to $1,351.51 per ounce
at 0441 GMT, a day after it touched a one-week high of $1355.74.
    U.S. gold futures         rose 0.1 percent to $1,354.50 per
ounce.
    "Gold shot up in glittering fashion on haven demand while
catching a fillip from the underlying move in commodity prices,"
said Stephen Innes, head of trading for Asia-Pacific for OANDA
in Singapore.
    Resources stocks surged in Asia on Thursday as oil prices
climbed to their highest in over three years. Aluminium prices
reached their highest since 2011, alumina touched an all-time
peak and nickel jumped the most in 6-1/2 years.            
       
    "With base metals rallying quite strongly it could lead to
higher inflation... Gold could be used as a hedge against
inflation risk," said OCBC analyst Barnabas Gan.
    Inflation fears boost gold, which is seen as a safe haven
against rising prices. 
    "Other important point to note is that the tariff threats
being imposed by both Trump and China has not been taken off the
table... If trade tensions escalate further gold prices could go
up to $1,600 per ounce," Gan added.
    The Chinese commerce ministry said on Thursday China is well
prepared to handle any negative effects from its trade dispute
with the United States, and that the U.S. would be making a
miscalculation if it is determined to contain China's rise.
            
    Spot gold faces a resistance at $1,356 per ounce, a break
above which could lead to a gain to $1,365.23, said Reuters
technical analyst Wang Tao.             
    Meanwhile, spot silver        rose 0.5 percent to $17.23 per
ounce. Prices had hit $17.26, their highest since Feb. 1, in the
previous session.
    Platinum        climbed 1.1 percent to $945.80 per ounce. It
had touched a three-week high of $948.70 on Wednesday.
    Palladium        was up 0.1 percent at $1,036.08 per ounce. 

 (Reporting by Eileen Soreng in Bengaluru; Editing by Sunil
Nair)
  
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