July 12, 2018 / 10:57 AM / 6 days ago

PRECIOUS-Gold edges higher as dollar rally pauses, silver slides

    * Silver slips to weakest since December
    * Platinum falls to one-week low

 (New throughout, updates prices, market activity and comments;
adds second byline and NEW YORK dateline)
    By Renita D. Young and Maytaal Angel
    NEW YORK/LONDON, July 12 (Reuters) - Gold edged higher on
Thursday as the dollar eased off a six-month high against the
Japanese yen, but bullion failed to gain traction as traders
said U.S.-China trade tensions so far were boosting the U.S.
currency instead of the precious metal.
    Stock markets and commodities gained after a turbulent
session on Wednesday when the United States ratcheted up trade
war threats on China, while the greenback held at lofty levels
but was little changed on the day.                   
    The dollar index       , which measures the greenback
against a basket of six currencies, was flat in the North
American session near its highest since July 3.
    Some market watchers said the dollar may have peaked for
now, especially if the U.S. economy shows signs of weakness and
the Federal Reserve slows the pace of interest-rate hikes. If
the dollar weakens, dollar-priced gold would be cheaper for
non-U.S. investors.
    "The (gold) market is lacking direction and very technical
in its characteristics," said Alasdair Macleod, head of research
at Goldmoney.com.
    Looking ahead, "gold could go marginally better. There are
signs that the U.S. economy may be slowing down a bit and if
that's so, we can expect the Fed to take its foot off the
interest rate pedal a bit," Macleod said.
    Spot gold        gained 0.4 percent, trading at $1,247.07
per ounce by 1:35 p.m. EDT (1735 GMT). On Wednesday, gold
slipped 1 percent to hit its lowest in over a week at $1,240.89.
    U.S. gold futures         for August delivery settled up
$2.20, or 0.2 percent, at $1,246.60 per ounce. 
    U.S. consumer prices barely rose in June, but the underlying
trend kept pointing to a steady buildup of inflation pressures
that could keep the Fed on a path of gradual interest rate
increases.             
    Investors remained focused on the U.S.-China trade conflict.
             They often turn to bullion as a safe haven in times
of political uncertainty, but have not done so this time around.
    "The technicals don't look good. It looks like gold will
remain under pressure," said Chris Gaffney, president of world
markets at TIAA Bank. "We could see gold lose that $1,200
handle."
    Silver        declined 1.4 percent at $15.97 an ounce.
Earlier in the session it fell to its lowest since mid-December
at $15.72 an ounce.
    Platinum        increased 1.5 percent at $837.25 an ounce,
after falling to a more than one week low at $821.25 earlier.
Palladium        gained 1.2 percent at $949.10 per ounce.

 (Additional reporting by Karen Rodrigues in Bengaluru. Editing
by David Gregorio and Jane Merriman)
  
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