PRECIOUS-Gold gains as stocks slip; en route to 4th weekly gain

Reuters

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 (Updates prices)
    * U.S. consumer prices post first drop in 9 months
    * Gold up about 0.3 percent so far this week
    * Palladium set for third straight weekly gain 

    By Swati Verma
    BENGALURU, Jan 11 (Reuters) - Gold edged higher on Friday
and was on track for its fourth successive weekly gain, as U.S.
stocks slipped and expectations rose that the U.S. Federal
Reserve might halt its monetary policy tightening cycle.
    Spot gold  XAU=  was up 0.2 percent at $1,288.47 an ounce by
1:52 p.m. EST (1852 GMT). U.S. gold futures  GCv1  settled 0.2
percent higher at $1,289.5.
    "With equities down slightly heading into the weekend, there
is some flight to safety in gold," said Bob Haberkorn, senior
market strategist at RJO Futures.
    An index of world stock markets eased on Friday after a
five-day winning streak.  MKTS/GLOB 
    "The equities are looking a little heavy up at these levels
and yesterday's speech by Fed Chairman Powell felt like Fed
might adopt a dovish stance on rates moving forward, which is
lending a lot of support to gold," Haberkorn added.
    Fed Chairman Jerome Powell said on Thursday the U.S. central
bank could be patient on rate policy.  urn:newsml:reuters.com:*:nL1N1ZA2CM
    Data on Friday showed U.S. consumer prices fell for the
first time in nine months in December, which likely supports
recent remarks by several policymakers, including Powell, for
caution about raising interest rates this year.  urn:newsml:reuters.com:*:nUSNBCEFP7
 urn:newsml:reuters.com:*:nL1N1ZA1MY
    Gold tends to gain on expectations of lower interest rates,
as they reduce the opportunity cost of holding non-yielding
bullion.
    "Recent inflation data from around the globe points to a
tamer outlook on rising prices in the coming months," Jim
Wyckoff, senior analyst at Kitco Metals, wrote in a note.
    "That should allow world central banks to be less hawkish on
their monetary policies, which would be a bullish element for
the precious metals markets."
    Gold is up about 0.3 percent for the week, mainly supported
by a weaker dollar, which slipped to about three-month lows on
Thursday against the backdrop of dovish views from the Fed and a
de-escalation in the U.S.-China trade dispute.
    U.S. officials expect China's top trade negotiator to visit
Washington this month after this week's talks with mid-level
officials in Beijing.  urn:newsml:reuters.com:*:nL3N1ZA03L
    "The $1,300 resistance level for gold is looking very
vulnerable. Risk aversion has been supportive, but as we're
seeing now, its primary driver is the dollar," said OANDA senior
market analyst Craig Erlam.
    Among other precious metals, palladium  XPD=  was down 0.2
percent at $1,319.50 an ounce, and was up about 1.4 percent for
the week. 
    Platinum  XPT=  slipped 0.7 percent to $814.10 and ounce and
was down over 1 percent for the week.
    Silver  XAG=  gained 0.3 percent to $15.61 an ounce. But it
was on track to record a weekly decline after rising for three
weeks. 

 (Reporting by Swati Verma and Eileen Soreng in Bengaluru
Editing by Susan Thomas)
 ((Swati.Verma@thomsonreuters.com; +1-651-848-5832, outside
N.America, +91-80-6749-6356/1298; Reuters Messaging:
swati.verma.thomsonreuters.com@reuters.net))

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