Gold inches higher as Brexit hopes boost sterling and the euro
* Brexit deal "realistic in six to eight weeks" -EU
* Sterling and euro rise sharply
* Dollar supported by trade fears and interest rate
* Gold must rise above $1,220 to regain momentum -analyst
(Updates prices, headline; adds comment, second byline, NEW
YORK to dateline)
By Renita D. Young and Peter Hobson
NEW YORK/LONDON, Sept 10 (Reuters) - Gold prices inched
higher as hopes of a swift Brexit deal boosted the sterling and
the euro against the dollar, making bullion cheaper for buyers
in Britain and the euro zone.
Michel Barnier, the European Union's chief negotiator, said
an agreement on Britain's exit from the bloc was "realistic in
six to eight weeks."
Spot gold gained 0.1 percent at $1,195.91 per ounce
by 1:41 p.m. EDT (1741 GMT), while U.S. gold futures December
delivery settled down 60 cents, or 0.1 percent, at $1,199.80 per
Gold has tumbled more than 12 percent from a high of
$1,365.23 in April as trade disputes, weak emerging market
currencies and rising U.S. interest rates have driven a dollar
Gold prices briefly dipped on Monday as investors sought
safety in the dollar on trade tensions, said Walter Pehowich,
executive vice president of investment services at Dillon Gage
U.S. President Donald Trump said on Friday he was ready to
impose tariffs on virtually all Chinese imports, prompting a
threat by China to retaliate.
China's yuan fell again on Monday as investors assumed that
the United States had less to lose from a trade war than China,
the world's biggest gold consumer.
Also supporting the dollar was strong U.S. jobs data on
Friday, which suggested that the Federal Reserve would continue
to raise interest rates.
Higher rates increase bond yields, making non-yielding
bullion less attractive, and tend to boost the dollar. A rate
increase is expected this month.
Speculators have ramped up bets on lower prices, with their
net short position in Comex gold the biggest since the data were
first compiled in 2006.
Until spot gold prices hold above the $1,220-$1,235 range,
they would not rise, said Tyler Richey, co-editor of the Sevens
Holdings of gold-backed exchange-traded funds are down
almost 5 million ounces, or 8.6 percent, from a May high.
"If we get some sort of favorable resolution or at the very
least a solid step forward in trade negotiations, that could
help initiate that dollar pullback," supporting gold, Richey
Among other precious metals, spot silver was up 0.5
percent at $14.17 per ounce, while platinum rose 0.6
percent at $783.49 and palladium lost 0.3 percent at
(Additional reporting by Nallur Sethuraman in Bengaluru
Editing by David Goodman and Richard Chang)
First Published: 2018-09-10 02:51:36
Updated 2018-09-10 20:06:03
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