September 11, 2017 / 4:38 AM / 10 months ago

PRECIOUS-Gold retreats from 1-year high as dollar gains ground

    * Spot gold may break support at $1,332/oz - technicals
    * Dollar index up 0.3 percent at 91.605
    * Specs raise net longs in gold for 8th straight week - CFTC

 (Adds detail, updates prices)
    By Apeksha Nair
    Sept 11 (Reuters) - Gold fell early on Monday after hitting
its highest in over a year in the previous session, as the
dollar recovered  from last week's lows and as lack of
geopolitical developments dented safe-haven appeal.
    Spot gold        was down 0.8 percent at $1,335.10 an ounce
by 0705 GMT. It rose to $1,357.54 on Sept. 8, the highest since
Aug. 16, 2016.
    U.S. gold futures         for December delivery were also
down 0.9 percent at $1,339.40 an ounce.
    "The major determinant of gold last week was actually
geopolitical tensions, but over the weekend, we did not see any
crisis triggering event so we're going to have less chances for
gold prices in the upward direction," said Mark To, head of
research at Hong Kong's Wing Fung Financial Group.
    The U.S. dollar won a reprieve from risk aversion on Monday
and pulled away from last week's 2-1/2 year low after North
Korea held a party over the weekend rather than launch another
    "I would go long on the dollar for one week or so, but not
for too long because the major determinants, the geopolitical
tensions, are still with us and the slowing of interest rate
hikes and other tightening measures are going to be with us as
well," To said.
    North Korea warned on Monday the United States would pay a
"due price" for spearheading a U.N. Security Council resolution
against its latest nuclear test.                                
    Federal Reserve policymakers are expected to discuss balance
sheet shrinkage at their next meet from Sept. 19 to 20 in
Washington and are widely expected keep interest rates
    It is too soon to predict when the Fed should next raise
rates as it continues to tighten policy, given "cross currents"
in the economy and markets, New York Fed President William
Dudley said on Friday.             
    Higher interest rates tend to boost the dollar and push bond
yields up, putting pressure on gold prices by increasing the
opportunity cost of holding non-yielding bullion. 
    Spot gold may break a support at $1,332 per ounce and fall
more to the next support at $1,317, said Reuters technical
analyst Wang Tao.              
    Speculators raised their net long position in COMEX gold for
the eighth straight week to the highest in nearly a year in the
week to Sept. 5.        
    Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, fell 0.3 percent to 834.50
tonnes on Friday.          
    In other precious metals, silver        slipped 0.5 percent
to $17.83 an ounce after touching its highest since April in the
previous session.
    Platinum        lost 0.4 percent to $1000.70 an ounce, while
palladium        was 1 percent higher at $944 an ounce.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Christian
Schmollinger and Sherry Jacob-Phillips)
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