June 6, 2018 / 2:00 PM / 4 months ago

PRECIOUS-Gold flat; weak dollar supports, upcoming Fed meeting pressures

    * Gold gets limited support from geopolitics  -analysts
    * SPDR holdings dip to lowest in nearly 3 months

 (Recasts; updates prices, headline; adds comment, second
byline, NEW YORK to dateline)
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, June 6 (Reuters) - Gold prices were steady
on Wednesday, see-sawing in a narrow range as a weaker dollar
and trade tensions provided support but investor anticipation of
a U.S. rate hike from the Federal Reserve next week weighed on
prices.
    Spot gold        was flat at  $1,295.80 per ounce by 1:50
p.m. ET (17:50 GMT).  U.S. gold futures         for August
delivery settled down 80 cents, or 0.1 percent, at $1,301.40 per
ounce. 
    "Investors are sitting on the fence, they only want to be
involved when we break out of the range," said Ole Hansen, head
of commodity strategy at Saxo Bank in Copenhagen.
    Gold was trapped between a ceiling at the 200-day moving
average at around $1,308 and $1,286 on the downside, he added.
    The case for hiking U.S. interest rates next week was
bolstered on Tuesday by upbeat U.S. data.             
    Gold, a non-interest-paying asset, could see demand take a
hit from higher rates. Traders said a rate hike could boost the
dollar, which would pressure gold.       
    "Strength in the dollar index could push the gold price back
toward the $1,280 mark," said ThinkMarkets chief market analyst
Naeem Aslam.
    On Wednesday, a softer greenback supported
dollar-denominated gold after the euro rose to a 10-day high
when European Central Bank officials said an end to the bank's
bond-buying program by the end of 2018 was plausible.       
    Potential gold investors were waiting to see how trade
tensions play out since many believe recent U.S. tariffs are
negotiating tactics, analysts said.
    "Investor interest is mixed towards gold in the current
environment, with geopolitical tensions attracting reduced flows
and limiting the downside risk rather than propelling prices
higher," Standard Chartered said in a note. 
    More upcoming events could affect gold markets, said John
Caruso, senior market strategist at RJO Futures.
    "There's some anxiety going into next week with the Kim Jong
Un summit Tuesday," Caruso said. 
    "Thursday, a pivotal European Central Bank meeting will
discuss the timeline on exiting their quantitative easing. A lot
of things out here could be a boon for gold traders."
    Silver        gained 1.2 percent to $16.65 per ounce,
earlier hitting $16.74, its highest since May 14.
    Platinum        added 0.2 percent to $902 an ounce and
palladium        gained 2.2 percent at $1,015.75, earlier
climbing to a six-week high of $1,024.90. 
    "Technical levels have been broken through the $1,010 level
in spot palladium," said Walter Pehowich, executive vice
president of investment services at Dillon Gage Metals, adding
the next level of resistance is $1,057.

 (Additional reporting by Karen Rodrigues in Bengaluru
Editing by David Gregorio and Edmund Blair)
  
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