June 28, 2017 / 11:11 AM / a year ago

PRECIOUS-Weaker dollar and stock market jitters drive gold higher

    * Stocks down after cyber attack, U.S. healthcare delay
    * Dollar lowest since November
    * Bond yields rise on Draghi comments
    * Gold climbs above 100-day moving average

 (Updates prices)
    By Peter Hobson
    LONDON, June 28 (Reuters) - Gold prices rose on Wednesday as
the dollar weakened and stock markets were held down by a global
cyber attack and delay to U.S. healthcare legislation which
fuelled doubts about President Donald Trump's ability to pass
stimulus measures.                        
    The dollar sank to its lowest since November while the euro
hit a one-year high after European Central Bank President Mario
Draghi appeared to hint that stimulus could be trimmed this
year, though sources later said he had been misinterpreted.
    A weaker dollar makes dollar-denominated bullion cheaper for
holders of other currencies and can increase demand. 
    Spot gold        was up 0.2 percent at $1,249.81 an ounce at
1357 GMT, while U.S. gold futures         were 0.3 percent
higher at $1,250.40 an ounce. 
    Gold prices have been held down in recent months as stock
markets rose and hit record highs in the United States and
Britain, offering better investment returns.              
    But the risk of a deeper stock market correction meant
investors now wanted to keep their gold, said Ole Hansen, head
of commodities strategy at Saxo Bank.
    "With the selling appetite fading, it gives some room to the
upside," he said.      
    Stock investors were also on edge after U.S. Federal Reserve
Chair Janet Yellen said shares may be over-valued, Hansen said.
    However, bond yields rose after Draghi's comments on ECB
stimulus, limiting the appeal of non-yielding bullion.      
    On the technical side, gold rose above its 100-day moving
average. Fibonacci resistance was at $1,255.20, analysts at
ScotiaMocatta said in a note. 
    "Expect to see prices perking up heading into the latter
part of the week, especially if the combination of a weaker
dollar and U.S. equity markets stays with us for a little while
longer," said INTL FCStone analyst Edward Meir in a note.
    Spot silver        was up 0.4 percent at $16.72 an ounce.
    Platinum        was 0.3 percent higher at $919.25, and
palladium        was down 0.2 percent at $856.
    The platinum market was heading for a third year of global
surplus in 2017 as demand from the auto and jewellery sectors
weakened, consultancy CPM Group said in a report. It also said a
surplus was expected in the palladium market.             

 (Additional reporting by Vijaykumar Vedala and Nithin Prasad;
Editing by Adrian Croft and Elaine Hardcastle)
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