July 13, 2018 / 1:08 AM / 4 months ago

PRECIOUS-Gold prices subdued as dollar extends rally

    BENGALURU, July 13 (Reuters) - Gold prices were muted early
Friday as the dollar extended gains from the previous session
when strong U.S. inflation data and trade war concerns boosted
demand for the greenback. 
        
    FUNDAMENTALS  
    * Spot gold        was down about 0.1 percent at $1,246.11
an ounce at 0050 GMT. 
    * U.S. gold futures         for August delivery were little
changed at $1,246.30 an ounce.
    * The U.S. dollar hit a six-month high against the Japanese
yen        on Friday. Against a basket of six major currencies
      , the dollar was up 0.1 percent at 94.899.       
    * U.S. consumer prices recorded their largest increase in
nearly 6-1/2 years in the year through June, while the monthly
pace continued to suggest a steady buildup of inflation that
could keep the Federal Reserve on a path of gradual interest
rate increases.             
    * Fed Chairman Jerome Powell said he believes the U.S.
economy remains in a "good place," with recent government tax
and spending programs likely to boost gross domestic product for
perhaps three years.               
    * Asian shares rose on Friday following gains on Wall Street
overnight, as concerns over an escalating U.S. trade war with
China took a breather.               
    * The United States and China could reopen talks on trade
but only if Beijing is willing to make significant changes, U.S.
Treasury Secretary Steven Mnuchin said on Thursday.             
    * Kim Jong Un told President Donald Trump he believed their
efforts could open up a "new future" between North Korea and the
United States and expressed hope for "practical actions" in the
future, according to a letter from the North Korean leader
released on Thursday.             
    * The European Central Bank will keep rates at a record low
for as long as needed to raise inflation, and its interest rate
guidance should be seen as "open-ended", policymakers concluded
in June, according to minutes of their meeting published on
Thursday.             
    * The European Commission on Thursday cut its forecasts for
the euro zone's economic growth this year, citing among the top
causes for its revision trade tensions with the United States
and rising oil prices which push the bloc's inflation higher.
            
    * SPDR Gold Trust      , the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.48 percent to
795.19 tonnes on Thursday.             
    
    DATA AHEAD (GMT)
     *    China     Trade data                               Jun
    0600  Germany   Wholesale price index                    Jun
    1230  U.S.      Import prices                            Jun
    1230  U.S.      Export prices                            Jun
    1400  U.S.      University of Michigan sentiment index   Jul
    
    *No exact timing

 (Reporting by Apeksha Nair in Bengaluru; editing by Richard
Pullin)
  
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