August 2, 2018 / 3:39 AM / 15 days ago

PRECIOUS-Gold prices edge higher as dollar eases against yen

    * Spot gold remains neutral in $1,214-$1,226/oz range -
technicals
    * U.S. Fed keeps rates steady, on track for September hike
    * Asian shares down on fresh U.S.-Sino trade war worries
    * Bank of England set to raise rates on Thursday

 (Updates prices)
    By Apeksha Nair
    BENGALURU, Aug 2 (Reuters) - Gold prices rose on Thursday,
recovering from the previous session's fall, supported by a
weaker dollar versus the Japanese yen in Asian trade.
    Spot gold        was up 0.2 percent at $1,218.23 an ounce,
as of 0701 GMT, after losing 0.65 percent in the previous
session.
    U.S. gold futures         were little changed at $1,226.70
an ounce.
    "I think people are just watching the dollar. The dollar-yen
is down and gold is up," said Yuichi Ikemizu, Tokyo branch
manager, ICBC Standard Bank said, adding that the latest
headlines on the trade war front between the United States and
China had likely induced some buying.
    The dollar was slightly lower at 111.68 yen        on
Thursday. The greenback was, however, supported against major
peers after the U.S. Federal Reserve kept interest rates steady
and gave an upbeat assessment of the world's biggest economy,
keeping it on course to increase borrowing costs in September.
            
    A weaker dollar makes greenback-denominated gold cheaper for
holders of other currencies while higher interest rates
typically pressure gold by increasing the opportunity cost of
holding non-yielding bullion.
    "The FOMC (Federal Open Market Committee) didn't bring
anything much and it's earnings season, so I don't expect gold
to move out of a range," Ikemizu said.    
    Spot gold remains neutral in a range of $1,214-$1,226 per
ounce, Reuters technicals analyst Wang Tao said.             
    Asian stocks fell with sentiment fragile after the latest
escalation in Sino-U.S. trade war, while global bond markets
were rattled by Washington's increased borrowing and Japan's new
tolerance for higher yields.                          
    U.S. President Donald Trump sought to ratchet up pressure on
China for trade concessions by proposing a higher 25 percent
tariff on $200 billion worth of Chinese imports, his
administration said on Wednesday.                
    Elsewhere, the Bank of England looks set to raise interest
rates on Thursday to their highest level since the financial
crisis almost a decade ago, defying warnings that it is taking a
gamble ahead of Brexit, the terms of which remain unclear.
             
    Holdings in SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, fell 0.40 percent to 796.96
tonnes on Wednesday.             
    Among other precious metals, silver        climbed 0.4
percent to $15.41 an ounce. Platinum        rose 0.3 percent to
$814.35 and palladium        edged 0.2 percent higher at
$915.85.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Subhranshu
Sahu and Sherry Jacob-Phillips)
  
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