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PRECIOUS-Gold gains amid N.Korea concerns, but heads for 2nd weekly decline
September 22, 2017 / 4:23 AM / 3 months ago

PRECIOUS-Gold gains amid N.Korea concerns, but heads for 2nd weekly decline

    * Spot gold faces resistance at $1,299 - technicals
    * North Korea seen considering a hydrogen bomb test
    * Asian stocks, dollar retreat

 (Adds comment, detail; updates prices)
    By Apeksha Nair
    Sept 22 (Reuters) - Gold rebounded from a four-week low on
Friday as the latest twist in tensions between the United States
and North Korea prompted investors to seek safe-haven assets.
    Spot gold        was up 0.4 percent at $1,296.41 an ounce,
as of 0643 GMT, having hit a four-week low of $1,287.61 in the
previous session.
    Bullion was down 1.7 percent for the week and was headed for
a second weekly decline.
    U.S. gold futures         for December delivery climbed 0.4
percent to $1,299.80 an ounce.
    U.S. President Donald Trump ordered new sanctions against
North Korea on Thursday and Pyongyang's leader defiantly vowed
to persist with its nuclear and missile programmes and said it
would consider measures against the United States.             
    North Korea said on Friday it might test a hydrogen bomb on
the Pacific Ocean after Trump vowed to destroy the country, with
leader Kim Jong Un promising to make a "mentally deranged" Trump
pay dearly for his threats.                                     
    "Recent fiery rhetoric between the North Koreans and
President Trump has led to a mild rebound in the gold price, but
not enough to breach the important $1,300/oz mark," said John
Sharma, economist at National Australia Bank.
    "It appears there is some concern among market participants
about these comments, but they are discounted somewhat given
past examples of bluster between these protagonists," Sharma
said.
    The dollar and Asian stocks fell on Friday against the
backdrop of these tensions while the Japanese yen and Swiss
franc gained on the possibility of North Korea conducting
another nuclear test.                    
    Geopolitical risks typically boost demand for safe-haven
assets such as gold and the Japanese yen.
    "The dollar-yen's pullback has supported gold on this move
higher," a Hong Kong-based trader said.
    However, the U.S. Federal Reserve's indication on Wednesday
of one more rate increase by the end of the year could continue
to weigh on gold, the trader said.
    Gold is highly sensitive to rising interest rates because
they increase the opportunity cost of holding non-yielding
bullion.
    Spot gold may end its current weak bounce around a
resistance at $1,299 per ounce and then fall towards a support
at $1,281, said Reuters technicals analyst Wang Tao. 
            
    Silver        climbed 0.5 percent to $17.02 an ounce, while
platinum        inched up 0.2 percent to $937 an ounce.
    Both metals were, however, set for a second weekly decline.
    Palladium        rose 0.4 percent to $913.75 an ounce but
was set to post a third straight weekly loss.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Sherry
Jacob-Phillips and Amrutha Gayathri)
  

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