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PRECIOUS-Gold slips as equities and dollar surge ahead of Fed meeting
September 18, 2017 / 10:46 AM / 3 months ago

PRECIOUS-Gold slips as equities and dollar surge ahead of Fed meeting

    * Dollar hovers near eight-week high against yen
    * Fed expected to unveil plans to trim balance sheet
    * Specs raise net longs for ninth straight week

 (Updates prices)
    By Maytaal Angel
    LONDON, Sept 18 (Reuters) - Gold hit a 2-1/2 week low on
Monday as the dollar rose ahead of a two day Federal Reserve
meeting and global equities surged.
    The dollar hit an eight week high against the yen as data
showing a pick up in U.S. consumer prices increased bets the Fed
could raise interest rates again in December.
    Investors also expect the Fed will announce plans to start
trimming its balance sheet at its meeting on Tuesday and
Wednesday in a move that should support the dollar and weigh on
dollar-priced gold.
    World stocks hit a record high ahead of the Fed meeting,
with investors favouring risky assets ahead of perceived safe
havens such as gold.              
    Spot gold        was down 0.6 percent at $1,311.51 an ounce
by 1346 GMT, having earlier touched $1,309.63, its lowest since
Aug. 31.
    U.S. gold futures         for December delivery fell 0.8
percent to $1,314.90.
    "Gold could fall below $1,300 in the short term, but the
question remains how people perceive the U.S. economy and the
need for higher interest rates," said Ole Hansen, head of
commodity strategy at Saxo Bank.
    "At this stage there's still not a strong view the U.S.
economy will accelerate. That should keep interest rates at a
manageable level and provide some support for gold."
    Persistently subdued inflation despite a pick up in global
growth remains the "trillion dollar" question for central banks
looking to normalise policy, the Bank for International
Settlements said on Sunday.              
    Investors currently put the probability of a December rate
hike at less than 50 percent in the futures market        .
    On the political front, investors largely brushed aside
concerns after a relatively quiet weekend on the Korean
peninsula.
    U.S. Ambassador to the United Nations Nikki Haley said on
Sunday the U.N. Security Council had run out of options on
containing North Korea's nuclear programme and the United States
may have to turn the matter over to the Pentagon.              
    An address by U.S. President Donald Trump to world leaders
at the United Nations on Tuesday could put North Korea tensions
back in focus.
    Elsewhere, data showed speculators raised their net long
position in COMEX gold contracts for the ninth straight week,
bringing it to a one-year high in the week to Sept. 12 and
leaving gold vulnerable to profit taking.        
    Silver        slipped 1.3 percent to $17.65 an ounce after
touching its lowest since Aug. 31.
    Platinum        dipped 0.3 percent to $960.50, while
palladium        gained 0.9 percent to $931.72.70.

 (Additionaly reporting by Apeksha Nair and Arpan Varghese;
Editing by David Goodman and Mark Potter)
  

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