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PRECIOUS-Gold ticks up, but still near 11-week low on U.S. rate outlook
June 8, 2015 / 3:22 AM / 3 years ago

PRECIOUS-Gold ticks up, but still near 11-week low on U.S. rate outlook

* Gold up slightly after falling to 11-week low on Friday
    * Strong US jobs report boosts September rate rise prospects
    * Dollar near 13-year peak against yen
    * Gold fund outflows continue, hurting sentiment

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, June 8 (Reuters) - Gold ticked up on Monday after
a three-day losing streak but was still hovering near an 11-week
low as a strong U.S. jobs report boosted expectations of a U.S.
interest rate rise in September. 
    Spot gold inched up 0.1 percent to $1,172.86 an ounce
by 0647 GMT. 
    The metal had fallen to $1,162.35 on Friday, its lowest
since March 19, after data showed U.S. job growth accelerated
sharply in May and wages picked up. Nonfarm payrolls increased
280,000 last month, the largest gain since December.
 
    The report, indicating signs of strong momentum in the U.S.
economy, bolstered expectations the Federal Reserve will begin
to raise rates in September and sent the dollar to a 13-year
peak against the yen.  
    "The technicals of the markets have deteriorated to such an
extent that they will now likely drive precious prices lower, as
the theme of a stronger dollar and the imminent rise in U.S.
rates again dominate sentiment," said INTL FCStone analyst
Edward Meir.
    Higher U.S. rates could diminish demand for
non-interest-paying bullion, while a stronger dollar makes gold
more expensive for holders of other currencies and reduces the
metal's safe-haven appeal.       
    Investor positioning in bullion continued to reflect bearish
sentiment. 
    Further outflows were seen in SPDR Gold Trust, the world's
top gold-backed exchange-traded fund, with holdings dropping
0.17 percent to 708.70 tonnes on Friday, the lowest since
mid-January.
    Hedge funds and money managers cut net long positions in
gold and silver in the week ended June 2, U.S. Commodity Futures
Trading Commission data showed on Friday. 
    "Gold ETF holdings are near their 2015 lows and seem to be
contributing to gold's gradual decline since mid-May," said MKS
Group trader James Gardiner. "Higher bond yields and a stronger
dollar are also continuing to put pressure on the metal." 
    Benchmark 10-year U.S. Treasury yields posted their steepest
weekly jump in nearly two years on Friday after the jobs report.
 
    The next major support level for gold is around the March
low of $1,142, although there are also signs of strong support
in the mid-to-low 60s, he said.
    In mining news, South Africa's Association of Mineworkers
and Construction Union said on Sunday it would launch a wildcat
strike if its rival union and gold mining companies impose a
wage deal on its members. 
    Strikes could potentially lower production levels and lend
support to prices.
     
    PRICES AT 0647 GMT        
 Metal            Last      Change   Pct chg
                                            
 Spot gold         1172.86     1.61     0.14
 Spot silver         16.08     0.02     0.12
 Spot platinum     1094.49     2.99     0.27
 Spot palladium     750.85      1.9     0.25
 Comex gold         1172.4      4.3     0.37
 Comex silver        16.07    0.086     0.54
 Euro               1.1102                  
 DXY                96.433                  
                                            
 COMEX gold and silver contracts show the
 most active months
 
 
 (Reporting by A. Ananthalakshmi; Editing by Richard Pullin and
Alan Raybould)

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