July 27, 2018 / 5:12 AM / in 2 months

PRECIOUS-Gold inches up as dollar eases ahead of U.S. GDP data

    * Spot gold down 0.6 percent for week
    * Spot gold to fall into $1,206-$1,214 range- technicals
    * Silver headed for seventh weekly decline
    * Palladium headed for biggest wkly gain since week ended
April 20

 (Updates prices)
    By Karen Rodrigues
    BENGALURU, July 27 (Reuters) - Gold prices edged higher on
Friday as the dollar slipped against major peers ahead of U.S.
economic growth data that could shed light on the pace of rate
hikes in the world's top economy.
    Spot gold        was up 0.1 percent at $1,223.96 an ounce as
of 0711 GMT. The precious metal was, however, on track for its
third straight weekly decline.
    U.S. gold futures         for August delivery were 0.2
percent lower at $1,223.20 an ounce.
    The dollar index       , which measures the greenback
against a basket of six major currencies, was down 0.02 percent
at 94.732. Against the yen, the dollar was down 0.2 percent at
110.98       .    
    A weaker dollar makes greenback-denominated gold cheaper for
holders of other currencies.
    Meanwhile, China's yuan weakened against the greenback,
breaching the key 6.8 per dollar level, dragged by a weaker
midpoint and fears of further depreciation amid Sino-U.S. trade
tensions.             
    A relatively strong greenback versus the yuan is limiting
upside for gold, said Ronald Leung, chief dealer at Lee Cheong
Gold Dealers in Hong Kong. 
    "There are concerns about rising U.S. interest rates and the
(U.S.-China) trade war, which are also affecting gold for the
time being," Leung added.
    Meanwhile, a strong reading in second-quarter U.S. economic
growth could back the case for faster rate hikes.             
    Higher U.S. rates tend to boost the dollar and push bond
yields up, denting the bullion's non-interest bearing appeal.  
    "Though we would argue that markets have relatively priced
in on greenback vigour and current-term economic data, the
precious metal looks poised to erode further as geopolitical
uncertainties from the EU and U.S. rescind gently," Benjamin Lu,
a commodities analyst at Singapore-based broker Phillip Futures,
said in a note.
    With trade tensions escalating between Washington and China,
the U.S. Senate on Thursday quietly passed a legislation that
would lower trade barriers on hundreds of items made in China.
            
    The United States also signalled on Thursday that it is set
to push ahead on trade talks with Canada and Mexico after
agreeing to suspend hostilities over tariffs with Europe in a
fragile deal that may clear the way for renewed pressure on
China.             
    Spot gold is expected to fall into a range of $1,206-$1,214
per ounce, said Reuters technical analyst Wang Tao.         
    Among other precious metals, silver        rose 0.4 percent
at $15.43 an ounce but was headed for its seventh weekly
decline.
    Palladium        gained 0.4 percent to $930.50 an ounce and
was up over 4 percent for the week, in what could be its biggest
weekly gain since the week of April 20.  
    Platinum        was nearly unchanged at $822.75 an ounce.

 (Reporting by Karen Rodrigues and Apeksha Nair in Bengaluru
Editing by Joseph Radford and Subhranshu Sahu)
  
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