September 25, 2017 / 7:08 AM / 10 months ago

PRECIOUS-Gold falls as dollar firms, N.Korea worries ease

    * Euro slips as Germany's Merkel wins but with less support
    * Platinum hovers near eight-week low hit last week

 (Updates prices)
    By Nithin ThomasPrasad
    Sept 25 (Reuters) - Gold prices dropped on Monday and
hovered around one-month lows hit last week, as the U.S. dollar
firmed and concerns over the Korean peninsula eased.
    Spot gold        was down 0.4 percent at $1,291.60 per ounce
as of 0646 GMT, not far from last week's near one-month low of
$1,287.61. Prices of the yellow metal dropped about 1.7 percent
last week in their second consecutive weekly decline. 
    U.S. gold futures         for December delivery slipped 0.2
percent to $1,295.00 per ounce.     
   "(Angela) Merkel's win in the German federal elections and a
quiet news weekend on the North Korean front, saw the U.S.
dollar opening stronger and gold's weekend safe-haven premium
eroded from Friday," said Jeffrey Halley, a senior market
analyst with OANDA.    
    The dollar index        was up 0.2 percent at 92.32 against
a basket of currencies. 
    The euro slipped after Merkel won a fourth term in a weekend
election, but faced leading a much less stable coalition in a
fractured parliament as support for the far-right party surged.
    "I guess markets are relieved about the ongoing sanctions
against North Korea. If you see what China and (U.S. President
Donald) Trump have done last week, it seems they are trying to
achieve a peaceful resolution," said OCBC analyst Barnabas Gan. 
    On Sunday, the United States said it has added North Korea
to its list of countries that are banned from entering the
    "The U.S. Federal Reserve started its balance sheet
reduction last week as well as still pricing in one-time rate
hike by year-end," Gan said.
    Last week, the Fed announced it would begin trimming down
its $4.5 trillion in assets and signalled it will likely raise
rates again this year.             
    "This still has a strong influence in pushing gold prices
lower as well," Gan said.
    Meanwhile, physical gold demand remained soft across Asia
this week despite a downwards price correction as consumers
awaited further dips in rates, while a government move to bring
transparency to bullion trading kept buyers on the sidelines in
    In other precious metals, silver        slipped 0.5 percent
to $16.87 per ounce. Prices fell over 3.5 percent last week in
the biggest weekly decline since early July. 
    Platinum        fell 0.2 percent to $928.50 per ounce, but
hovered around an eight-week low hit on Thursday. It shed 3.5
percent last week in its second consecutive weekly fall. 
    Palladium        gained 0.9 percent to $924.50 per ounce.

 (Reporting by Nithin Prasad in Bengaluru; Editing by Sherry
Jacob-Phillips and Subhranshu Sahu)
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