June 19, 2017 / 5:03 AM / 2 months ago

PRECIOUS-Gold hits near four-week low as dollar firms

    * Gold hits lowest since May 24
    * Fed's Dudley comments later in the day awaited for clues
    * Silver touches one-month low

 (Updates prices)
    By Nithin ThomasPrasad
    BENGALURU, June 19 (Reuters) - Gold edged lower on Monday to
touch a near four-week low as the dollar held firm, with the
market waiting on comments from a top U.S. Federal Reserve
official after last week's soft economic data.
    New York Fed President William Dudley, a close ally of Fed
Chair Janet Yellen, is due to take part in a roundtable with
local business leaders in Plattsburgh, New York. 
    "If Dudley confirms that the Fed will remain hawkish towards
interest rate hikes, I do not think gold will be able to recover
anytime soon," said Argonaut Securities analyst Helen Lau. 
    Spot gold        was down 0.3 percent to $1,249.61 per
ounce, as of 0804 GMT. During the session, it hit $1,248.63, its
lowest since May 24.
    U.S. gold futures         for August delivery fell 0.4
percent to $1,251 an ounce.
    Although the Fed raised rates last week, weaker economic
data has cast doubts over the central bank's ability to pursue
an aggressive monetary policy for the rest of the year.
            
    U.S. homebuilding fell for a third straight month in May to
the lowest level in eight months as construction activity
declined broadly, suggesting that housing could be a drag on
economic growth in the second quarter.             
    Higher interest rates tend to boost the dollar, putting
pressure on gold prices by increasing the opportunity cost of
holding non-yielding bullion. 
    Spot gold is expected to drop to $1,243 per ounce, as
suggested by its wave pattern and a Fibonacci projection
analysis, according to Reuters technicals analyst, Wang Tao.
            
    Gold is likely to be tested on the downside for at least the
first half of the week, Alex Thorndike, a trader at MKS PAMP
Group, said in a note.      
    Hedge funds and money managers raised their net long
position in COMEX gold for the third straight week to the
highest in seven months in the week to June 6, and upped it
slightly in silver, U.S. Commodity Futures Trading Commission
data showed on Friday.             
    In wider markets, the dollar was steady against a basket of
currencies on Monday, and Asian stocks rose, shaking off Wall
Street's uninspiring performance on Friday.             
    Among other metals, spot palladium        climbed 0.8
percent to $867.20, and platinum        slipped 0.5 percent to
$921.95 per ounce.
    Silver        edged 0.1 percent down to $16.57 per ounce.
Earlier in the session, it touched $16.57, its weakest since May
19.

 (Reporting by Nithin Prasad in Bengaluru; Additional reporting
by Vijaykumar Vedala; Editing by Sherry Jacob-Phillips and
Richard Pullin)
  

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