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PRECIOUS-Gold inches down as U.S. rate hike looms
November 16, 2017 / 4:11 AM / a month ago

PRECIOUS-Gold inches down as U.S. rate hike looms

    * Upbeat U.S. economic data raises Fed hike prospects
    * Gold seen neutral in tight $1,270-$1,286 range -
technicals

 (Updates prices)
    By Vijaykumar Vedala
    Nov 16 (Reuters) - Gold edged lower on Thursday as upbeat
U.S. economic data bolstered the possibility of the Federal
Reserve raising interest rates next month and beyond.
    Spot gold        was down 0.1 percent at $1,276.95 per ounce
at 0746 GMT, slipping from Wednesday's 3-1/2-week high of
$1,289.09.
    U.S. gold futures for December delivery         dipped 0.1
percent to $1,276.70.
    Gold has traded within a tight range of about $24 for the
month of November.
    "It is a combination of Fed rate hike (expectations) and
equity market volatility. There are increasing risks in the
market now," said Argonaut Securities analyst Helen Lau.
    "Views around these two countering forces could keep gold
flat in the short term," she added.
    Underlying U.S. consumer prices increased in October,
strengthening the view that a recent disinflationary trend
worrying the Fed probably had ended.               
    Falling unemployment and sustained growth mean the U.S.
economy has accelerated beyond a sustainable level so the Fed
should continue to raise interest rates, including next month, 
veteran Fed policymaker Eric Rosengren said on
Wednesday.                
    Another Fed policymaker, Charles Evans, said he will go with
an open mind into next month's policy meeting, at which the U.S.
central bank is expected to raise interest rates for a third
time this year.             
    Higher interest rates tend to boost the dollar and push bond
yields up, putting pressure on gold prices by increasing the
opportunity cost of holding bullion.
    Spot gold remains neutral in a range of $1,270-$1,286 per
ounce, and a break of that trading band could suggest a change
in direction, according to Reuters technical analyst Wang Tao.
            
    "It is perhaps best to remain sidelined for now, as the gold
complex seems to be trapped within a relatively tight trading
range and has yet to assert a meaningful direction," INTL
FCStone analyst Edward Meir said in a note. 
    Asian shares rose on Thursday, shrugging off losses on Wall
Street, and the dollar edged up as investors priced in more U.S.
rate hikes.           
    In other precious metals, palladium        was up 0.2
percent at $986.30 an ounce, after touching a two-week low on
Wednesday.
    Silver        gained 0.1 percent at $16.99 per ounce and
platinum        eased 0.1 percent to $930.70.   

 (Reporting by Vijaykumar Vedala in Bengaluru; Editing by
Richard Pullin and Manolo Serapio Jr.)
  

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