April 19, 2018 / 8:08 AM / 3 months ago

PRECIOUS-Gold gains as metals rally sparks inflation concerns

 (Updates prices)
    * Spot gold faces resistance at $1,356/oz -technicals
    * Higher base metal prices could boost inflation -analysts

    By Eileen Soreng
    BENGALURU, April 19 (Reuters) - Gold prices rose for a fifth
straight session, buoyed by a rally in base metals that has
fuelled concerns of inflationary pressures, with lingering
U.S.-China trade tensions lending further support to the
precious metal. 
    Spot gold        had risen 0.3 percent to $1,353.22 per
ounce by 0749 GMT, while U.S. gold futures         rose 0.2
percent to $1,356.30 per ounce.
    "Gold shot up in glittering fashion on haven demand while
catching a fillip from the underlying move in commodity prices,"
said Stephen Innes, head of trading for Asia-Pacific for OANDA
in Singapore.
    Inflation fears boost gold, which is seen as a safe-haven
against rising prices. 
    Resources stocks surged in Asia on Thursday as oil prices
climbed to their highest in over three years. Aluminium prices
reached their highest since 2011, alumina touched an all-time
peak and nickel jumped the most in 6-1/2 years.            
       
    "With base metals rallying quite strongly it could lead to
higher inflation ... Gold could be used as a hedge against
inflation risk," said OCBC analyst Barnabas Gan.
    "Another important point to note is that the tariff threats
being imposed by both Trump and China has not been taken off the
table ... If trade tensions escalate further gold prices could
go up to $1,600 per ounce."
    The Chinese commerce ministry said on Thursday that China is
well prepared to handle any negative effects from its trade
dispute with the United States, and that the U.S. would be
making a miscalculation if it is determined to contain China's
rise.             
    Spot gold faces resistance at $1,356 per ounce, a break
above which could lead to a gain to $1,365.23, said Reuters
technical analyst Wang Tao.             
    Meanwhile, spot silver prices        gained 0.8 percent to
$17.29 per ounce, having touched their highest since Feb.1, at
$17.31, earlier in the session.
    Platinum        climbed 1.4 percent to $949 per ounce. It
touched an over three-week high of $953.50 earlier in the day.
    Palladium        was 1.3 percent higher at $1,048.20 per
ounce, after marking its highest since Feb. 27 at $1,055.30. 

 (Reporting by Eileen Soreng in Bengaluru; Editing by Sunil Nair
and Joseph Radford)
  
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