November 17, 2017 / 5:08 AM / a year ago

PRECIOUS-Gold rises as dollar weakens on report Trump's election campaign subpoenaed

    * Gold on track for second straight weekly gain
    * Spot gold biased to rise above $1,270-$1,286 range -
    * Silver heading for best week in five

 (Updates prices, recasts first two graphs)
    By Vijaykumar Vedala
    Nov 17 (Reuters) - Gold edged higher on Friday as the dollar
weakened following a report that U.S. President Donald Trump's
2016 election campaign was subpoenaed for documents containing
specified Russian keywords from more than a dozen officials.  
    Investigators looking into possible Russian interference in
last year's U.S. presidential election issued the subpoena last
month, the Wall Street Journal reported.                  
    Spot gold        was up 0.2 percent at $1,281.51 per ounce,
as of 0811 GMT. It is up about 0.5 percent for the week, poised
to post a second straight weekly gain.   
    U.S. gold futures         for December delivery rose 0.3
percent to $1,281.80.
    "The fall in the dollar and strengthening in Asian
currencies have made gold attractive for Asian investors," said
John Sharma, an economist with National Australia Bank.
    However, uncertainties surrounding a U.S. tax reform bill
and a likely interest rate hike by the Federal Reserve next
month are sending mixed signals to the market, keeping gold
range-bound, he said.
    "Prices should likely continue to hover between $1,260 and
$1,290 in the short-term," he added. 
    Republican U.S. lawmakers on Thursday took an important step
toward the biggest tax code overhaul since the 1980s as the
House of Representatives approved a broad package of tax cuts
sought by Trump.             
    "Gold prices will continue a sideways drift in the coming
months as rising nominal interest rates in the U.S. keep a lid
on investment demand," BMI Research said in a note. 
    "Prices will grind moderately higher in the longer term as
developed market inflation rebounds."
    San Francisco Fed President John Williams reiterated his
view on Thursday that the U.S. economy is growing strongly
enough for the Fed to continue raising rates gradually over the
next couple of years to around 2.5 percent.             
    Meanwhile, Cleveland Fed President Loretta Mester said on
Thursday she feels inflation is poised to pick up, clearing the
way for the Fed to continue its gradual process of raising
interest rates.             
    Spot gold is biased to rise above a neutral range of
$1,270-$1,286 per ounce, and gain further towards $1,298,
according to Reuters technicals analyst Wang Tao.             
    The dollar index against a basket of six major currencies
       was down 0.2 percent.       
    In other precious metals, silver        was nearly unchanged
at $17.087 an ounce, platinum        rose 0.4 percent to $934.30
and palladium        gained 0.7 percent to $994.50. 
    For the week, silver has risen 1.1 percent, in what could be
its best week in five. Platinum is up 0.9 pct, heading for a
third straight weekly rise, while palladium is almost unchanged.

 (Reporting by Vijaykumar Vedala and Arpan Varghese in
Bengaluru; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)
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