February 12, 2018 / 10:08 AM / 10 months ago

PRECIOUS-Gold rises, but gains capped before U.S. price data

    * Gold support at $1,300, resistance at $1,345
    * Eyes on U.S. inflation data due Wednesday

 (Recasts, updates prices)
    By Pratima Desai
    LONDON, Feb 12 (Reuters) - Gold prices rose on Monday as the
dollar steadied, but gains are expected to be muted ahead of
inflation data from the United States later this week that could
mean U.S. interest rates rise faster than expected. 
    Spot gold        was up 0.2 percent at $1,318.54 an ounce at
1329 GMT. It has fallen more than 3 percent since hitting a
17-month peak at $1,366.07 in January. U.S. gold futures        
rose 0.4 percent to $1,320.70 an ounce.
    Worries about inflation in the United States surfaced after
data this month showed jobs growth surged and wages rose,
bolstering expectations that the U.S. labour market would hit
full employment this year.             
    U.S. inflation data for January is due on Wednesday and the
U.S. Federal Reserve next meets on March 20-21.            
    "The story is and will be about U.S. monetary policy and
dollar direction," Julius Baer analyst Carsten Menke said. "U.S.
growth is more solid, wages are rising and the worry is the Fed
will be forced into more rate hikes than currently expected."
    A lower U.S. currency makes dollar-denominated gold cheaper
for holders of other currencies, potentially boosting demand.
    The dollar was steady against a basket of six major
currencies as a bounce in equity markets ended a strong run for
the greenback, used by investors as a safe place to park assets
in times of financial market volatility.       
    "Gold has picked up a little in the last 24 hours, as a hint
of dollar weakness creeps back into markets," said Jordan
Eliseo, chief economist at gold trader ABC Bullion.
    Hedge funds and money managers slashed their net long
position in COMEX gold for the first time in eight weeks in the
week to Feb. 6, and cut it in silver, U.S. Commodity Futures
Trading Commission data showed on Friday.        
    Gold faces strong resistance at the 100-day moving average
around $1,345. A break of support at $1,300 could see the market
trying to test the 21-day moving average at around $1,275.
    Silver        gained 0.3 percent to $16.38 an ounce,
platinum        slipped 0.5 percent to $959.99 an ounce and
palladium        was up 0.8 percent at $982.50 an ounce.
    

 (Additional reporting by Nallur Sethuraman and Nithin Prasad in
Bengaluru, and Maytaal Angel in London.; Editing by Dale Hudson
and David Evans)
  
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