April 11, 2018 / 10:19 AM / in 6 months

PRECIOUS-Gold rises as risk aversion hurts equities and dollar

    * Gold climbs to two-week high of $1,351.43/oz
    * Palladium extends this week's 6 pct rally
    * Markets await U.S. CPI, Fed minutes later in the day
    * GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

 (Updates prices)
    By Jan Harvey
    LONDON, April 11 (Reuters) - Gold rose for a fourth day on
Wednesday as concerns over escalating tensions in Syria, U.S.
sanctions on Russia and the U.S.-China trade stand-off weighed
on stock markets and helped to knock the dollar index to a
two-week low. 
    The metal reached its strongest in two weeks as appetite for
nominally lower-risk assets sharpened. Palladium, which has also
benefited from fears that sanctions on Russia could hurt supply,
rose further after climbing nearly 6 percent in the past two
days.  
    Spot gold        was up 0.8 percent at $1,349.75 an ounce by
1155 GMT, having touched its highest in two weeks at $1,351.43.
U.S. gold futures         rose 0.5 percent to $1,352.90.
    "We've seen fears of a trade war and now more recently the
Russian sanctions," said Capital Economics analyst Simona
Gambarini. "Uncertainty, volatility and geopolitical risk have
been rising steadily since the start of the year."
    That has sparked good demand for gold through products such
as bullion-backed exchange-traded funds, she said. "Gold is
benefiting from the risk-off sentiment and because people are
trying to hedge against worst-case scenarios."
    European equities fell after two days of gains as tensions
over Syria and U.S. sanctions drove Russia's rouble to a
two-year low, while concerns about the prospect of a trade war
boosted traditional safety plays at the dollar's expense.
    The U.S. unit languished near a two-week low against a
basket of currencies.                   
    Gold is often perceived as a safe store of value during
times of political and financial uncertainty. 
    Markets are also awaiting cues on the outlook for U.S.
monetary policy from consumer inflation data and minutes from
the Federal Reserve's March meeting, due later on Wednesday.
    Tighter monetary policy raises the opportunity cost of
holding non-yielding bullion.
    Among other precious metals, silver        was up 0.2
percent at $16.59 an ounce, while platinum        gained 0.5
percent to $928.50.
    Palladium        was up 0.4 percent at $955.72. 
    The metal, more than 40 percent of which is produced in
Russia, has bounced strongly this week as sanctions against the
country fed into a technically driven rebound after the first
quarter's 10 percent slide.  
    Although Russian output of the metal has not been affected
directly, the sanctions have caused enough concern over supply
in a market that has been in deficit for a decade to bring some
speculative money back in, analysts said.             
    "With (sanctions target) UC Rusal owning 28 percent of
Norilsk Nickel, a significant producer of platinum group metals,
traders remain wary that supplies of the precious metal may also
be impacted," ANZ said in a note.

 (Reporting by Jan Harvey in London; Additional reporting by
Swati Verma in Bengaluru; Editing by Dale Hudson and David
Goodman)
  
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