PRECIOUS- Resilient dollar puts gold on track for weekly dip

Reuters

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    * Silver on track for third weekly fall
    * Bullion down 0.7% this week 
    * Dollar set to strengthen for a second week

 (Updates prices)
    By Arundhati Sarkar
    July 23 (Reuters) - Gold prices edged lower on Friday as a
stronger dollar dimmed bullion's appeal and put it on course for
its first weekly decline in five, with investors looking to the
U.S. Federal Reserve's next meeting for policy cues.
    Spot gold  XAU=  fell 0.5% to $1,797.62 per ounce by 1032
GMT. U.S. gold futures  GCv1  slipped 0.4% to $1,797.80.   
    Bullion is down 0.7% this week after hitting its lowest in
more than a week on Thursday.
    Gold has been range-bound because of the strength of the
U.S. dollar but could test $1,775 an ounce with the near-term
outlook still bearish, said Kunal Shah of commodities trader
Nirmal Bang Commodities. 
    Making gold expensive for holders of other currencies, the
dollar index  .DXY  held near a 3-1/2-month peak and was heading
for a second straight weekly gain.  USD/ 
    Market focus now turns to next week's U.S. Federal Reserve
meeting for more clues on monetary policy after the European
Central Bank on Thursday pledged to keep interest rates at
record lows for some time.  urn:newsml:reuters.com:*:nL1N2OY07V
    "This means that negative interest rates will remain a
permanent feature for now ... This should increase demand for
gold noticeably in the medium to longer term," Commerzbank said
in a note. 
    Lower interest rates reduce the opportunity cost of holding
non-yielding bullion.
    Limiting gold's losses, yields on U.S. Treasuries eased
after an auction of $16 billion in 10-year TIPS was bid at a
record low.  US/ 
    Silver  XAG=  slipped 1.2% to $25.15 per ounce, and was set
for a third consecutive weekly fall.
    Platinum  XPT=  fell 1.4% to $1,077.13, and palladium  XPD= 
shed 0.4% to $2,707.43.

 (Reporting by Arundhati Sarkar in Bengaluru; editing by David
Goodman and Jason Neely)
 ((Arundhati.Sarkar@thomsonreuters.com;
twitter.com/Arundhati_05; +1 646 223 8780 Ext: 2776))

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