May 14, 2015 / 12:51 AM / 3 years ago

PRECIOUS-Gold near 5-week high as soft US data eases rate hike fears

SINGAPORE, May 14 (Reuters) - Gold hovered near a five-week
high on Thursday, supported by overnight gains from sluggish
U.S. retail sales data that triggered speculation the Federal
Reserve will not hike interest rates soon.
    
    FUNDAMENTALS
    * Spot gold ticked 0.2 percent lower to $1,212.96 an
ounce by 0033 GMT, but remains near a five-week high of
$1,218.80 reached on Wednesday. The metal closed the previous
session up 1.9 percent.
    * Data on Wednesday showed U.S. retail sales were flat in
April as households cut back on purchases of automobiles and
other big-ticket items, the latest sign the economy was
struggling to rebound strongly after barely growing in the first
quarter. 
    * The dollar fell to a more than three-month low against a
basket of major currencies following the data on fears the Fed
will delay any rate hike. 
    * The greenback had rallied earlier on hopes the Fed will
raise rates from record lows. 
    * But U.S. growth in the first-quarter slowed to a crawl as
a strong dollar, harsh winter and a steep fall in oil prices
hurt profits and discouraged consumers from spending. The Fed
has said it will raise rates only when data points to a
strengthening economy. 
    * A delay in the rate hike could further hurt the dollar and
boost gold, a non-interest-paying asset. 
    * Among other precious metals, silver was also
trading near five-week highs, boosted by a 3.5 percent gain
overnight. 
    * Platinum and palladium held on to gains as
markets believed a strike in major producer South Africa was
possible as mining companies attempt to restructure.
    * South Africa's Association of Mineworkers and Construction
Union (AMCU) wants the basic pay for entry level workers in the
gold mining industry to be more than doubled, setting the stage
for tough pay talks.  
    * AMCU had previously called for a doubling of wages in the
platinum sector, sparking a record five-month long strike last
year in the platinum industry.
    * For the top stories on metals and other news, click
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    MARKET NEWS
    * The dollar languished at three-month lows against a basket
of major currencies early on Thursday after surprisingly soft
retail sales prompted investors to wonder if the Fed can afford
to hike interest rates at all this year. 
    
    PRICES AT 0033 GMT
 Metal           Last      Change   Pct chg
                                           
 Spot gold        1212.96    -2.27    -0.19
 Spot silver        17.11    -0.02    -0.12
 Spot platinum     1145.6     -2.4    -0.21
 Spot palladium       786     2.13     0.27
 Comex gold        1212.9     -5.3    -0.44
 Comex silver       17.12   -0.101    -0.59
 Euro              1.1345                  
 DXY               93.714                  
                                           
 COMEX gold and silver contracts show the
 most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Richard Pullin)

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