January 9, 2018 / 3:50 AM / 12 days ago

PRECIOUS-Gold prices ease on outlook for U.S. rate hikes

    * Spot gold may test resistance at $1,329/oz -technicals
    * Palladium hits record high at $1,111.40/oz Tuesday
    * Platinum off 3-1/2-month peaks marked on Monday

 (Adds trader comment, updates prices)
    By Sethuraman N R
    Jan 9 (Reuters) - Gold prices inched down on Tuesday amid
expectations for more U.S. interest rate hikes this year.
    Spot gold        was down 0.2 percent at $1,317.86 an ounce
by 0655 GMT. Last week, prices touched their strongest since
Sept. 15 at $1,325.86.
    U.S. gold futures         were down 0.1 percent at $1,318.80
an ounce. 
    The dollar hit a more than one-week high against a basket of
other major currencies on Monday       . It was steady at
$92.342 on Tuesday
    Investors are betting on further U.S. interest rate hikes
after Friday's payrolls data did nothing to challenge the
outlook for monetary policy tightening by the U.S. Federal
Reserve.             
    Atlanta Fed President Raphael Bostic, who is a voting member
of the central bank's policy board, said on Monday that two
hikes might be needed in 2018, in light of weak price pressures.
            
    "Gold will be under pressure (in the short term) as the
dollar will strengthen on U.S. tax reforms and rate hike
expectations," said Ji Ming, chief analyst at Shandong Gold
Group.
    "However, the market will get used to the rate hike
expectations soon and the dollar will lose its strength, pushing
gold higher," Ming added.
    "We can expect prices to go past 2017 highs in the second
half of 2018."
    Gold is highly sensitive to rising U.S. interest rates, as
these increase the opportunity cost of holding non-yielding
bullion, while boosting the dollar, in which it is priced.
    Spot gold may test resistance at $1,329 per ounce, as
suggested by a Fibonacci retracement analysis and a triangle,
according to Reuters technical analyst Wang Tao.             
    "Gold should see resistance at the recent low of $1,315 and
the psychological $1,300 level below that," said MKS PAMP Group
trader Tim Brown.
    "On the upside, a break above last week's high of $1,324
could see the yellow metal make a move on the September top of
$1,355." 
    Among other precious metals, spot silver        fell 0.3
percent to $17.08 an ounce.
    Platinum        dropped 0.8 percent to $964.35, after
hitting a 3-1/2 month peak on Monday at $973.60.
    Palladium        was up 0.7 percent at $1,108.22, after
marking a record high at $1,111.40 an ounce.

 (Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph
Radford)
  
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