April 10, 2018 / 10:18 AM / 5 months ago

PRECIOUS-Gold rises, hits near 1-week high on weak dollar, geopolitics

    * Dollar dips to two-week lows
    * Rising stock markets limit gold's gains
    * Platinum retreats back to discount to palladium

 (New throughout, updates prices, market activity and comments;
adds second byline and NEW YORK dateline)
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, April 10 (Reuters) - Gold prices rose on
Tuesday, hitting their highest in nearly a week as the U.S.
dollar weakened and investors awaited potential U.S. action
against suspected use of chemical weapons in Syria.
    Trump on Monday promised quick, forceful action in response
to a deadly suspected chemical weapons attack in Syria,
appearing to suggest a potential military response.             
            
    "Geopolitics is taking the main driving seat this week, so
gold has potentially got some room for the upside," said
Jonathan Butler, commodities analyst at Mitsubishi in London.
    "A lot will hinge on what is happening geopolitically
between Russia, Syria, Iran and all sorts of other countries
that could be potentially drawn into this."
    Spot gold        was up 0.4 percent at $1,341.29 an ounce by
1:35 p.m. EDT (1735 GMT), its highest since April 4.
   June U.S. gold futures         settled up $5.80, 0.4 percent,
at $1,345.90 per ounce. 
    Gold is often seen as a store of value during times of
geopolitical and economic uncertainty.
    Gold got a boost as the dollar index        dipped to a
two-week low against a basket of currencies. The dollar had
risen earlier after Chinese President Xi Jinping's promise to
cut import tariffs eased concerns about a trade conflict. 
                        
    Jinping's comments spurred a rally in global equity markets,
that capped gold's safe haven appeal despite the weakening
dollar, said Bob Haberkorn of RJO Futures in Chicago.
    "The upside has been limited due to the fact that China
appears to be offering some concessions to the trade war," he
said. He said gold could move higher if trade tensions
re-escalate or if bullion reaches $1,350, near the top end of
its latest trading range.
    Silver        gained 0.7 percent at $16.57 an ounce. The
session high was $16.65, a one-week high.
    Platinum        fell 0.1 percent at $930.80 an ounce, while
palladium        rose 2.3 percent at $950.72 an ounce, after
touching $961.30, a 12-day high.
    Platinum fell back to a discount to palladium, after rising
to a premium last Thursday. Last September, palladium gained the
upper hand over platinum for the first time in 16 years.
    "We are not convinced the platinum-palladium ratio can hold
consistently above parity this year as strong trends in the auto
sector which have weighed on the ratio remain in place," UBS
analyst Joni Teves said in a note. 
    Diesel vehicles use mostly platinum in catalytic converters
while petrol cars largely use palladium, but diesel sales in
Europe's largest car markets have been falling.

 (Additional reporting by Swati Verma and Eileen Soreng in
Bengaluru
Editing by David Gregorio and Keith Weir)
  
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