PRECIOUS-Gold up, poised for more gains on soft U.S. rate outlook

Reuters

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    * Gold rises above 200-day moving average 
    * Platinum rises to highest in more than four weeks 
    * Dollar index at 10-month low 
 
 (Updates prices; adds comment, byline, NEW YORK dateline) 
    By Marcy Nicholson and Eric Onstad 
    NEW YORK/LONDON, July 17 (Reuters) - Gold climbed on Monday 
and was likely to see further gains after the dollar slumped to 
multi-month lows on the back of data that pointed to weak U.S. 
inflation and dampened prospects for rate hikes.  
    "The dollar continues to be on the back foot and yields have 
dropped back somewhat from their relatively elevated positioning 
lately," said analyst Jonathan Butler at Mitsubishi in London. 
    Spot gold  XAU=  was up 0.5 percent at $1,234.61 an ounce by 
2:53 p.m. EDT (1853 GMT), while U.S. gold futures  GCcv1  for 
August delivery settled up 0.5 percent at $1,233.70. 
    "If gold remains at $1,230 or goes higher, there's an 
elevated risk that some of those short positions might start to 
be reversed and that would give some further upside to gold," 
Butler said.  
    Gold prices slightly pared gains as the U.S. dollar  .DXY  
came off its lows after hitting its lowest level against a 
basket of major currencies in 10 months as recent soft U.S. 
inflation and domestic demand figures undermined arguments for 
the Federal Reserve to raise interest rates.  urn:newsml:reuters.com:*:nL1N1K50H3  USD/  
    A weaker greenback supports gold since the dollar-priced 
commodity is less expensive for investors holding other 
currencies. 
    "Investor sentiment (for gold) has improved quite 
dramatically over the past week, especially with the weak data 
out of the United States last week," said ANZ analyst Daniel 
Hynes. "Gold is now primed for another rally." 
    The day's move took spot gold above the 200-day moving 
average near $1,230 per ounce. 
    "The technical bounce looks fairly solid," Hynes said. 
    Gold's performance, however, has been relatively 
disappointing, said Joni Teves, strategist for UBS. 
    "There are enough supportive factors currently and we think  
the downside has now likely been contained. But at the same 
time, there is also a lack of catalysts strong enough to 
encourage investors to chase gold higher here," Teves said in a 
note. 
    Among other precious metals, platinum  XPT=  gained 0.9 
percent at $923.74 per ounce after touching $934.40, the highest 
since June 15.     
    Spot silver  XAG=  rose 1.2 percent at $16.13 per ounce, 
after hitting $16.19, the highest in nearly two weeks. 
    Analysts polled by Reuters cut their average 2017 silver 
forecast to $17.32 an ounce from $17.98 after the metal slid 9 
percent in the second quarter.  urn:newsml:reuters.com:*:nL8N1K42OD 
    Palladium  XPD=  added 1 percent to $866.88 per ounce.  
    "We saw a triple bottom form in platinum last week along 
with the lows of May and December. When that happens that tends 
to be a pretty solid support level," Butler said. 
 
 (Additional reporting by Arpan Varghese in Bengaluru; editing 
by Louise Heavens and Marguerita Choy) 
 ((Marcy.Nicholson@thomsonreuters.com, +1-646-223-6043; Reuters 
Messaging Marcy.Nicholson.ThomsonReuters.com@reuters.net)) 
 
Keywords: GLOBAL PRECIOUS/  
     

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