April 11, 2018 / 3:43 AM / 3 months ago

PRECIOUS-Gold hits 1-wk peak on dollar weakness, geopolitical concerns

    * Gold prices up for a fourth straight session
    * Spot gold may retest resistance at $1,354/oz -technicals
    * Markets await U.S. CPI, Fed minutes due later in the day

 (Updates prices; adds analyst comment, details)
    By Swati Verma
    BENGALURU, April 11 (Reuters) - Gold prices touched a
one-week high on Wednesday, as the dollar fell to two-week lows
and as a host of geopolitical factors stoked demand for the
safe-haven metal.
    Spot gold        rose 0.4 percent to $1,344.16 an ounce as
of 0704 GMT, its fourth straight session of gains. Prices
earlier hit a one-week high of $1,345.35 an ounce.
    U.S. gold futures         gained 0.2 percent at $1,348 an
ounce.
    "Lots of things are happening at the same time - the
(U.S.-China) trade war, a possible U.S. attack on Syria that
navigates to conflict between the United States and Russia, and
that has a very strong impact on gold markets," said Yuichi
Ikemizu, Tokyo branch manager at CIBC Standard Bank.
    Russia and the United States tangled on Tuesday at the
United Nations over the use of chemical weapons in Syria as
Washington and its allies considered whether to strike at
President Bashar al-Assad's forces over a suspected poison gas
attack last weekend.             
    "Dollar price movements and political developments are
driving markets right now, including gold," said Jordan Eliseo,
chief economist at gold trader ABC Bullion. 
    The dollar index       , which measures the greenback
against six other major currencies, was down 0.1 percent at
89.518, after earlier falling to 89.472, its weakest since March
28.        
    A weaker dollar makes bullion cheaper for holders of other
currencies.
    "In the short-term, gold may well remain range-bound as it
has for some time, though there are no shortages of catalysts
that could send it higher," Eliseo said.
    Spot gold may retest a resistance at $1,354 per ounce, said
Reuters' technical analyst Wang Tao.         
    On Tuesday, U.S. President Donald Trump welcomed Chinese
President Xi Jinping's promise to open China's economy further,
reinforcing a view that a full-scale trade war can be averted.
                         
    "Tensions between China and the U.S. seem to be relaxing
after Xi's conciliatory note, but with the Trump administration,
people are not really sure what is going to happen next,"
Ikemizu said. "So, investors want to hold positions in gold."
    Gold is often seen as a safe investment during times of
political and financial uncertainty. 
    Markets are also waiting for cues on the outlook for U.S.
monetary tightening from consumer inflation data and minutes
from the Federal Reserve's March meeting, due later on
Wednesday.
    Tighter monetary policy raises the opportunity cost of
holding non-yielding bullion.
    In other precious metals, silver        rose 0.3 percent
to$16.60 an ounce. 
    Platinum        climbed 0.7 percent to $930.15 an ounce,
while palladium        fell 0.3 percent to $949.50 an ounce.

 (Reporting by Swati Verma in BENGALURU
Editing by Kenneth Maxwell and Biju Dwarakanath)
  
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