May 8, 2018 / 4:31 AM / 6 months ago

PRECIOUS-Gold prices subdued as dollar hovers around 4-mth peak

    * Dollar index marks highest since Dec. 28 overnight
    * Market awaits Trump decision on Iran nuclear deal
    * Spot gold may revisit May 1 low of $1,301.51/oz
-technicals

 (Adds MKS trader comment, updates prices)
    By Apeksha Nair
    BENGALURU, May 8 (Reuters) - Gold prices remained subdued on
Tuesday as the dollar held steady near its 2018-high on the
relative strength of the U.S. economy.
    Spot gold        was down about 0.1 percent at $1,313.20 per
ounce at 0635 GMT, after closing marginally lower in the
previous session.
    U.S. gold futures         for June delivery were unchanged
at $1,314.10 per ounce. 
    The dollar index        hovered near a four-month high on
Tuesday, continuing to draw support from higher Treasury yields
and upbeat prospects for the U.S. economy, leaving its major
rivals such as the euro struggling.       
    "While seeing some support from stronger oil prices and
uncertainty over the U.S. position on Iran, gold continues to
trade in-line with dollar flows, which are restricting any
sustained top-side moves," MKS PAMP Group trader Sam Laughlin
said in a note.    
    A stronger dollar makes gold and other greenback-denominated
commodities more expensive for holders of other currencies.
    Oil prices retreated from 3-1/2-year highs on Tuesday as
investors waited for an announcement by U.S. President Donald
Trump on whether the United States will reimpose sanctions on
Iran.                   
    "I think the Iran deal is probably something that could turn
things around. Oil might spike and gold could go with it," said
a Hong Kong-based trader. 
    As benchmark oil prices touched $70 a barrel, U.S. Federal
Reserve officials said on Monday that rising inflation and wage
pressures are not enough yet to prompt a change in the central
bank's rate outlook.             
    The market is awaiting Trump's decision on Iran and the U.S.
Consumer Price Index (CPI) data for a move in gold prices, the
trader said, adding that the Producer Price Index (PPI) numbers
coming out this week might be something to look at to see "if
there's more hawkishness going down to the end of the year". 
    Spot gold may revisit its May 1 low of $1,301.51 per ounce
as it twice failed to break resistance at $1,317, Reuters
technical analyst Wang Tao said.              
    Meanwhile, silver        gained 0.2 percent to $16.48 an
ounce, while platinum        rose 0.2 percent to $909.65 an
ounce, having hit its highest since April 25 in the last
session.
    Palladium        slipped 0.3 percent to $969 an ounce, after
hitting its highest since April 27 on Monday.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Subhranshu
Sahu and Joseph Radford)
  
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