December 17, 2018 / 4:37 AM / 6 months ago

PRECIOUS-Firm dollar weighs on gold amid global growth risks

 (Updates prices)
    * Speculators switch to net long position in Comex gold -
    * Spot gold biased to fall to $1,224-$1,228 range -
    * Fed meeting on Dec. 18-19 awaited for monetary policy

    By Karthika Suresh Namboothiri
    BENGALURU, Dec 17 (Reuters) - Gold prices inched lower on
Monday as the dollar held firm below a 19-month peak on
safe-haven demand amid concerns of a global economic slowdown,
and as investors awaited cues on U.S. interest rate hikes from a
Federal Reserve meeting this week.
    Spot gold        was unchanged at $1,238.12 per ounce at
0820 GMT. U.S. gold futures        rose 0.1 percent at $1,242.1
per ounce.
    "Gold's move today is purely dollar-driven," said Kunal
Shah, head of research, Nirmal Bang Commodities in Mumbai,
    "Ahead of the FOMC (Federal Open Market Committee) meeting,
we are going to see some downward movement... But the fact
remains that the underlying strength in gold is likely to
    Markets will closely watch the future trajectory of U.S.
monetary policy at the Federal Reserve's Dec. 18-19 meeting
where the board is set to raise interest rates by 25 basis
    "Markets will rally on the back of dollar weakness after the
central bank signals a more dovish stance, but the advance will
fall back quickly as global growth concerns reassert
themselves," INTL FCStone analyst Edward Meir said in a note.
    Prospects of higher U.S. interest rates are negative for
dollar-priced gold as they raise the opportunity cost of holding
the bullion.
    The dollar index       , which measures the greenback
against other major currencies, was just below the 19-month high
of 97.71 hit on Friday.       
    Weaker-than-expected economic data from China and Europe and
fears of a possible U.S. government shutdown enhanced appeal for
the U.S. currency, which has played the role of a safe-haven
asset in recent times.            
    Spot gold is biased to break a support at $1,232 per ounce,
and fall to a lower support zone of $1,224-$1,228, according to
Reuters technical analyst Wang Tao.             
    Meanwhile, hedge funds and money managers switched to net
long position in Comex gold in the week ended Dec. 11, the U.S.
Commodity Futures Trading Commission (CFTC) said on Friday. 
    This was the first time gold speculators held a net long
position since July, and the strongest since June.
    "Uncertainties of the trade war are still weighing on the
market," said Dick Poon, general manager, Heraeus Metals Hong
Kong Ltd.
    "It is getting close to Christmas time, so it is getting
super quiet in the market. Investors reduce their inventories as
much as possible before the year ends."
    Among other precious metals, spot palladium        rose 0.9
percent to $1,248.44 per ounce. 
    Silver        climbed 0.2 percent to $14.59 per ounce, while
platinum        declined 1 percent to $779.50 per ounce.

 (Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing
by Sherry Jacob-Phillips and Sunil Nair)
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