January 31, 2018 / 4:36 AM / 9 months ago

PRECIOUS-Gold inches up as dollar eases ahead of Fed decision

    * Gold has best month since Aug, up 3.1 pct in Jan
    * Gold expected to break support at $1,335/oz -technicals
    * Platinum on track for best month since Jan, 2017

 (Adds comment, updates prices)
    By Nithin ThomasPrasad
    Jan 31 (Reuters) - Gold prices rose on Wednesday from
one-week lows hit in the previous session, as the dollar fell
against a basket of major currencies and traders awaited the
outcome of the U.S. Federal Reserve's two-day meeting. 
    Spot gold        had climbed 0.4 percent to $1,343.51 per
ounce by 0738 GMT. In the previous session, it touched its
lowest since Jan. 23 at $1,334.10 an ounce. 
    U.S. gold futures         for February delivery rose 0.4
percent to $1,339.80 per ounce.
    Gold prices were on track for a third consecutive monthly
gain and are up 3.1 percent so far in January, their best month
since August, largely due to weakness in the dollar.  
    "Yellen may deliver a hawkish surprise setting the stage for
a possible policy pivot while trumpeting in the Powell era. Gold
bears may take advantage of this move," said Stephen Innes, APAC
trading head for OANDA.
    A rate hike in March would not come as a surprise, but any
change in the pace of hikes would pose a risk to gold's rally,
Innes noted. 
    The Fed is expected to leave interest rates unchanged on
Wednesday while signalling a gradual tightening of monetary
policy later this year as the U.S. economy continues to expand
and job gains remain solid.                 
    The dollar inched lower against a basket of major rivals on
Wednesday, showing scant reaction to U.S. President Donald
Trump's State of the Union address.       
    "Trump's speech focused on national security and immigration
... that's why gold prices are going up. As for infrastructure
(spending), there was nothing special," a Taiwan-based trader
said.
    Traders were also waiting for the U.S. jobs report on Friday
that will include data on nonfarm payrolls and average hourly
earnings.
    Spot gold is expected to break support at $1,335 per ounce
and fall more towards the Jan. 18 low of $1,323.70, as suggested
by its wave pattern and a Fibonacci retracement analysis,
according to Reuters technical analyst Wang Tao.         
    In other precious metals, silver        climbed 0.4 percent
to $17.20 per ounce, after hitting a one-week low of $17.03
earlier in the session. 
    Palladium        was up 0.4 percent at $1,058.74 per ounce,
having fallen nearly 3 percent in the previous session to mark a
five-week low at $1,047.00. 
    Platinum        gained 0.7 percent to $1,002.90 per ounce.
It is up 8.4 percent for the month so far, on track for its best
month since January, 2017. It hit a one-week low the session
before. 

 (Reporting by Nithin Prasad and Nallur Sethuraman in Bengaluru;
Editing by Richard Pullin and Joseph Radford)
  
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