November 21, 2017 / 5:00 AM / in a year

PRECIOUS-Gold edges higher, Fed minutes in focus

    * Spot gold may break support at $1,274/oz - Technicals
    * Global platinum market deficit will rise sharply in 2018 -
industry report

 (Updates prices)
    By Vijaykumar Vedala
    Nov 21 (Reuters) - Gold prices inched higher on Tuesday,
with investors waiting for minutes from the U.S. Federal
Reserve's last meeting for clues on the outlook for potential
rate rises. 
    The minutes of the meeting, when it kept interest rates
unchanged, will be released on Wednesday.             
    Spot gold        was up 0.3 percent at $1,280.46 per ounce,
as of 0840 GMT. The metal fell about 1.4 percent on Monday in
its biggest one-day percentage drop since Sept. 11. 
    U.S. gold futures         for December delivery gained 0.4
percent to $1,280.10.
    "Given the fact that the December rate hike is almost a done
deal, market watchers will look more closely at what is the Fed
rhetoric for post-December," said OCBC analyst Barnabas Gan.
    Higher interest rates tend to boost the dollar and push bond
yields up, putting pressure on gold prices by increasing the
opportunity cost of holding non-yielding bullion.             
    Fed Chair Janet Yellen said on Monday she would resign her
seat on the Fed's Board of Governors once Jerome Powell is
confirmed and sworn in to replace her as head of the U.S.
central bank.             
    "The fact that Yellen has now confirmed (she will be
leaving) is adding a little bit of volatility as traders adjust
their positions while they make sense of the implications of the
incoming new Fed chairman Jerome Powell in terms of interest
rate direction," said Loh Mun Chun, director, private wealth at
GoldSilver Central in Singapore.
    Traders were also keeping an eye on safe-haven demand for
gold after U.S. President Donald Trump put North Korea back on a
list of state sponsors of terrorism on Monday.                 
    "It is very hard to predict as to what Trump is going to
do... We are waiting to see how North Korea reacts and whether
it escalates global tensions," OCBC's Gan said. 
    Spot gold may break support at $1,274 per ounce, and fall
towards the Oct. 6 low of $1,260.16, according to Reuters
technical analyst Wang Tao.             
    In other markets, the dollar gave back some of its gains in
Asian trading but remained within sight of a one-week high
against a basket of currencies as German political uncertainty
continued to pressure the euro.                     
    With the U.S. dollar weakening slightly after its overnight
rally, gold maintained its inverse relationship and drifted
higher, said Jeffrey Halley, a senior market analyst with OANDA.
    Silver        climbed 0.2 percent to $16.94 an ounce and
platinum        was up 0.1 percent at $924.74. Palladium       
gained 0.1 percent to $989.35 an ounce.  
    On Monday, silver fell 2.3 percent, its biggest one-day
percentage fall since Sept. 26, while platinum lost nearly 3
percent, marking its worst day since early May.  
    Meanwhile, global platinum market deficit will rise sharply
next year thanks to resurgent demand from the jewellery and
industrial sectors and declining production, an industry report
said on Tuesday.             

 (Reporting by Vijaykumar Vedala and Arpan Varghese in
Bengaluru; Editing by Vyas Mohan and Sherry Jacob-Phillips)
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