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PRECIOUS-Gold hovers near 2-week low on firm dollar, US rate outlook
May 28, 2015 / 3:47 AM / 2 years ago

PRECIOUS-Gold hovers near 2-week low on firm dollar, US rate outlook

* Gold still struggling after Tuesday's near 2-pct drop
    * Dollar index near one-month high
    * Coming up: US weekly jobless claims, pending home sales

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, May 28 (Reuters) - Gold struggled to recover from
a two-week low on Thursday as a robust dollar and the prospects
of higher U.S. interest rates dented demand for the metal.
    Spot gold was little changed at $1,188.55 an ounce by
0647 GMT. The metal hit a two-week low of $1,183.76 in the
previous session, but pared losses to end flat for the day.
    Silver on Wednesday also hit a low of $16.55 an
ounce, its lowest since May 13.
    "Gold and silver flounder against a backdrop of no major
data releases to give price guidance and sluggish physical
demand," HSBC analyst James Steel said.
    There has been no major U.S. data release since Tuesday data
showing strong core business spending, new home sales and
consumer confidence.
    Gold fell 1.7 percent on Tuesday, its sharpest one-day drop
since April, as investors believed the robust data would prompt
the Federal Reserve to soon raise interest rates.     
    The dollar will be an important factor in gold's near-term
direction, Steel said, adding that $1,180 was the next big
support level for bullion. 
    The greenback was trading near a one-month high against a
basket of major currencies, and hit a 13-year high against the
yen on Thursday.  
    The dollar has been well-bid since Fed Chair Janet Yellen
said last week the U.S. central bank is poised to raise interest
rates later this year.
    Data on U.S. weekly jobless claims and pending home sales
due later on Thursday will be eyed for trading cues.
    Investors believe higher rates would dent gold's appeal as
it is a non-interest-paying asset. Robust data and a higher
greenback diminish demand for gold as a safe haven. 
    Traders were also eyeing the Greek debt crisis, worsening of
which could trigger safe-haven demand for gold.
    Greece and its international creditors have converged on key
points on a cash-for-reforms deal but talks still have some room
to cover before an agreement is clinched, the country's economy
minister said on Thursday. 
    In the physical markets, buying did not pick up
significantly this week despite the sharp slide in prices,
bullion dealers said.
    PRICES AT 0647 GMT
 Metal            Last      Change   Pct chg
 Spot gold         1188.55     1.15       0.1
 Spot silver         16.65    -0.02     -0.12
 Spot platinum     1118.74     1.76      0.16
 Spot palladium      782.5    -1.48     -0.19
 Comex gold         1188.4      2.8      0.24
 Comex silver       16.685    0.038      0.23
 Euro               1.0939                   
 DXY                97.006                   
 COMEX gold and silver contracts show the
 most active months
 (Editing by Himani Sarkar and Anand Basu)

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