April 9, 2018 / 10:12 AM / 2 months ago

PRECIOUS-Gold prices rise as dollar wilts, awaits U.S. data

    * Dollar eases versus currency basket, stocks firm
    * Palladium set for biggest one-day rise in 3 months
    * GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

 (Updates prices, headline)
    By Renita D. Young and Jan Harvey
    NEW YORK/LONDON, April 9 (Reuters) - Gold prices rose on
Monday as the U.S. dollar turned lower, but caution over the
prospect of a potential escalation in the China-U.S. trade
dispute, upcoming U.S. data and U.S. Federal Reserve meeting
minutes kept prices in a range. 
    Spot gold        gained 0.3 percent at $1,336.80 per ounce
by 2:25 p.m. EDT (1825 GMT), while U.S. gold futures         for
June delivery settled up $4, or 0.3 percent, at $1,340.10 per
ounce. 
    The U.S. dollar index        slipped against a basket of
currencies and global equities rose as the U.S. government
played down fears of a trade war with China, though traders
remained cautious.            
    The two countries have threatened each other with tens of
billions of dollars of tariffs, but officials in U.S. President
Donald Trump's administration have stressed the tariffs are not
yet in place and the dispute could be resolved through talks.
    Chinese President Xi Jinping is due to deliver a speech on
Tuesday at the Boao Forum for Asia in Hainan province.
            
    "If [the speech] shows that the trade war tensions are not
de-escalated, we could see a big upside move for the gold
price," Think Markets' chief market analyst Naeem Aslam said. 
    "If we look at the price action for gold, we are
consolidating," he added. "Support is at $1,307 and resistance
is at $1,348. We need to break out of this zone, and that would
set the tone for the new trend."
    Markets are also looking ahead this week to minutes from the
latest Federal Open Markets committee meeting and CPI data,
anticipation keeping gold hemmed in a tight range, said Michael
Matousek, head trader at U.S. Global Investors.
    "Traders are not making any big today moves until they get
more confirmation on the direction of rates or inflation,"
Matousek said.
    Higher interest rates tend to make gold less attractive
since it does not bear interest.
    Silver        gained 1.3 percent at $16.53 an ounce, while
platinum        increased 2.4 percent at $934.50 an ounce.
    Palladium        rose 4 percent at $936.10 an ounce.
    The autocatalyst metal had fallen for the past 11 sessions,
hitting its lowest since mid-August at $895.47 on Friday. It is
now down more than a fifth from the record high reached in
January.
    "The near 20 percent correction in palladium prices signals
a possible bear market," ScotiaMocatta said in a monthly note.
    The correction is not surprising given the sharp price gains
of recent years, it said, adding, "Palladium's strong
fundamentals remain in place, so we would expect dip-buying
before too long."

 (Reporting by Renita D. Young and Jan Harvey;
Additional reporting by Swati Verma in Bengaluru;
Editing by David Evans, Diane Craft and Will Dunham)
  
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