April 16, 2018 / 9:43 AM / in 5 months

PRECIOUS-Gold inches up as dollar slides, even as risk premium fades

    * Risk havens slip as investors reassess Syria strikes
    * Palladium climbs again after near 10 pct rise last week
    * GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

 (Recasts with updated prices, comment throughout; adds byline,
NEW YORK dateline)
    By Chris Prentice and Jan Harvey
    NEW YORK/LONDON, April 16 (Reuters) - Gold prices rose on
Monday as losses in the U.S. dollar bolstered, though gains were
muted as financial markets bet that air strikes on Syria would
not escalate into a wider conflict.
    Prices have trended sideways since January, buoyed by
geopolitical worries but capped by expectations for further U.S.
interest rate hikes and strong technical resistance at
$1,360-$1,365 an ounce - their January, February and April
highs.
    Spot gold        was up 0.10 percent at $1,346.31 per ounce
by 2:49 p.m. EST, up 0.1 percent, as U.S. gold futures        
for June delivery settled up 0.21 percent at $1,350.70 per
ounce. 
    Forces from the United States, Britain and France targeted
Syria with air strikes on Saturday, hitting what they said were
three of its main chemical weapons facilities.             
    Gold prices reached a high of $1,350.52 on the back of the
news, but struggled to maintain those gains amid expectations
the attacks would not mark the start of greater Western
involvement in the conflict.            
    "Some of the risk (premium) has come down following the air
strikes," Capital Economics analyst Simona Gambarini said. "Some
market participants were thinking that maybe there could be an
escalation of the tensions, but that has not happened and
therefore prices have come down a bit."
    Bullion found support as the dollar sank against the euro.
      
    "Syria, China trade tensions, and the dollar index falling
off are all good reasons for gold prices to continue to rise,"
said senior market strategist at RJO Futures in Chicago. "It's
disappointing there wasn't more of a rally, but traders are
turning to equities at these levels."
    Speculators raised their net long positions in COMEX gold
contracts by 363 contracts to 138,212 contracts in the week to
April 10, U.S. Commodity Futures Trading Commission (CFTC) data
showed on Friday.        
    Silver        was up 0.39 percent at $16.683 per ounce.
    Palladium        rose 1.54 percent at $1,002.22 an ounce,
off highs of $1,012.10, the strongest since March 1. Platinum
       was 0.15 percent higher at $928.90. 
    "Palladium is shooting up because of Russian sanctions,"
said George Gero, managing director of RBC Wealth Management.
    Prices rose 9.6 percent last week, their biggest weekly gain
in more than a year, as concerns that supply from number one
producer Russia could be disrupted by U.S. sanctions fed into a
strong technical rebound following the metal's 20 percent fall
from its January record high.
    The gyrations shot palladium's premium above platinum above
$76 an ounce, the strongest since January. 
    Platinum has historically been the higher-priced metal, but
supply concerns have driven palladium to a rare premium in
recent months.


 (Reporting by Jan Harvey; Additional reporting by Swati Verma
in Bengaluru; editing by Alexander Smith and Chizu Nomiyama)
  
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