Gold falls for third session ahead of big U.S. debt auction
* U.S. to launch auctions for $258 billion worth of debt
* Gold move down to $1,322 seen a buying opportunity-analyst
(Adds comments on platinum, updates prices)
By Eric Onstad
LONDON, Feb 20 (Reuters) - Gold prices were weighed down by
a stronger dollar on Tuesday, dropping for the third session,
but were underpinned by |political worries and uncertainty about
this week's huge U.S. bond auctions.
The dollar continued its rebound from three-year lows as
investors believed the currency was due an upward correction
after a brutal sell-off in recent weeks.
A buoyant dollar makes commodities priced in the greenback
more expensive for buyers using other currencies.
Spot gold was down 0.4 percent at $1,340.84 an ounce
by 1455 GMT.
U.S. gold futures shed 1 percent to $1,343 an ounce.
Spot gold is expected to fall to the next support level at
$1,326, according to Reuters technical analyst Wang Tao.
Gold may get a boost later on Tuesday, however, when the
U.S. government launches a series of auctions for $258 billion
worth of debt this week.
"We have a barrage of U.S. debt being auctioned off and if
there is less than the required appetite for that mountain of
debt, that could weaken the dollar and support gold," said Ole
Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Geopolitical uncertainty ranging from disunity at the recent
Munich security conference to threatened U.S. trade sanctions
may increase safe-haven demand for gold, he added.
"That leads me to believe that any correction in gold will
continue to be a buying opportunity at this stage, with $1,322
as my target for those who are thinking of getting back into the
Gold investors will also be eyeing the release on Wednesday
of the minutes of the U.S. Federal Reserve's Jan. 30 to 31
Among other precious metals, silver slipped 0.2
percent to $16.63 an ounce, while the gold/silver ratio held
above 80 after touching the highest since April 2016 on Friday.
"Silver is on the defensive. The (gold/silver) ratio has
stayed above 80 for relatively short periods, so from a
historical perspective, silver looks cheap at this point,"
Palladium added 0.4 percent to $1,037 an ounce, after
rising to the highest since Feb. 2 at $1,050 in the previous
A major low was achieved earlier this month when palladium
hit $957.75, Stéphanie Aymes, head of technical analysis at
Societe Generale, said in a note.
"A break past $1,055 will prompt accrued positive signals
towards $1,071/78...and more importantly towards the channel
upper band at $1,145/55."
Platinum rose 0.6 percent to $1,008.40 an ounce after
rising to a three-week high of $1,013.60 on Monday.
(Additional reporting by Eileen Soreng in Bengaluru; Editing by
Adrian Croft and Louise Heavens)
First Published: 2018-02-20 03:52:26
Updated 2018-02-20 17:04:43
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