PRECIOUS-Gold dips as dollar gains upper hand after Powell remarks

Reuters

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    * Gold to face selling pressure as interest rates rise
-analyst
    * Dollar resumes upward move
    * Silver bars pile up at Russia's Polymetal 

 (Recasts, adds comments, updates prices)
    By Arundhati Sarkar
    June 23 (Reuters) - Gold traded lower on Thursday as a
stronger dollar and remarks from U.S. Federal Reserve Chair
Jerome Powell about the central bank's commitment to tame rising
prices dimmed its safe-haven appeal. 
    Spot gold  XAU=  fell 0.4% to $1,829.89 per ounce by 1056
GMT. U.S. gold futures  GCv1  inched 0.4% lower to $1,830.70.
    While the precious metal is considered a hedge against
inflation and economic instability, it also contends with the
dollar as a safe-store of value. Therefore, a firmer dollar
makes greenback-priced bullion more expensive for overseas
buyers.  USD/   
    Gold is expected to face gradual downward pressure and move
towards $1,800, with Powell reiterating the rate hike path and
the dollar also strengthening, Bank of China International
analyst Xiao Fu said.
    "Because gold's a safe haven asset, it will attract buying
on (recession risk) demand, but the rising rates are very
powerful in terms of impacting other asset classes and including
gold."
    Higher U.S. interest rates increase the opportunity cost of
holding non-yielding bullion.
    Powell on Wednesday noted that the Fed is not trying to
engineer a recession to stop inflation but is fully committed to
bringing prices under control even if doing so risks an economic
downturn.  urn:newsml:reuters.com:*:nW1N2WO016  urn:newsml:reuters.com:*:nL1N2Y917N  urn:newsml:reuters.com:*:nW1N2X9040
    Powell is due to testify again in Washington D.C. later on
Thursday. 
    "Market participants appear to be changing their minds
almost hourly about whether gold is a safe haven at present,"
Commerzbank commodities analyst Daniel Briesemann said in a
note.
    Spot silver  XAG=  dropped 1% to $21.17 per ounce, platinum
 XPT=  fell 0.7%, to $920.06. Palladium  XPD=  rose 0.3% to
$1,869.70.
    Silver bars have piled up at Russia's Polymetal as it seeks
new export destinations to replace Europe. Polymetal has not
been directly targeted by Western sanctions, but along with
other Russian commodity producers, it has been impacted by
Western banks and shippers having reduced dealing with Russian
companies.  urn:newsml:reuters.com:*:nL1N2YA0AA

 (Reporting by Arundhati Sarkar in Bengaluru; Editing by Anil
D'Silva)
 ((Arundhati.Sarkar@thomsonreuters.com;
twitter.com/Arundhati_05; +1 646 223 8780 Ext: 2776))

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