PRECIOUS-Gold heads for small weekly gain on hopes of dovish Fed

Reuters

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        * 
      Dollar heads for weekly drop
    

        * 
      Silver, platinum bound for weekly gains
    

  
 (Updates prices)
    By Arpan Varghese
       Nov 25 (Reuters) - Gold prices steadied on Friday, en
route to a weekly gain, buoyed by the dollar's retreat on a
perceived dovish tilt in the U.S. Federal Reserve's interest
rate hike strategy.
        Spot gold  XAU=  was little changed at $1,755.13 per
ounce by 0633 GMT, having risen 0.4% so far this week. U.S. gold
futures  GCv1  advanced 0.5% to $1,755.00.
  
    Silver  XAG=  shed 0.8% to $21.34, but was up about 2.2% for
the week.
    The dollar's retracement has kept gold well-supported as
"the slower pace of rate outlook is being looked upon as a sign
of peak hawkishness to further unwind the bearish positioning in
the yellow metal built up since the start of the year," said IG
market strategist Yeap Jun Rong. 
    A "substantial majority" of Fed policymakers agreed it would
"likely soon be appropriate" to slow the pace of rate hikes, the
readout of the Nov. 1-2 meeting showed on Wednesday.  FEDWATCH  
    This pressured the dollar  =USD , making gold cheaper for
overseas buyers.  USD/ 
    Gold could bounce to $1,790-1820 by December-end, led by
safe-haven demand and the dollar's weakness amid a dovish Fed,
said Jigar Trivedi, analyst with Mumbai-based Reliance
Securities.
    A majority of traders expect a 50 bps rate increase at the
Fed's December meeting.  FEDWATCH 
    But the December meeting will be a "black box" event given
the variation in projections before and after recent cooler-than
expected U.S. inflation data, leaving gold sensitive to upcoming
data as buyers look "for greater conviction that current rate
hike expectations are well-anchored," Jun Rong added. 
 FEDWATCH 
   High rates have kept a leash on gold's traditional status as
a hedge against high inflation and other uncertainties this
year, as they translate into higher opportunity cost to hold the
non-yielding asset.
    Holdings of the top SPDR Gold Trust  GLD  gold-backed
exchange-traded-fund have shed about 68 tonnes since the
beginning of this year.  GOL/ETF 
        Spot Platinum  XPT=  fell 0.6% to $981.90 per ounce,
while palladium  XPD=  edged 0.2% higher to $1,885.13.
  
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 (Reporting by Arpan Varghese in Bengaluru; Editing by Rashmi
Aich and Uttaresh.V)
 ((arpan.varghese@thomsonreuters.com;))

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