Gold edges up as dollar dips on U.S. interest rate uncertainty
* Palladium off all-time high of $1,185.40/oz
* SPDR Gold Trust holdings lowest in a week
* Hedge funds hike net short positions in gold
* GRAPHIC-2018 asset returns: (http://tmsnrt.rs/2jvdmXl)
By Swati Verma
BENGALURU, Nov 19 (Reuters) - Gold inched up on Monday as
the dollar fell, but the metal stayed in a tight range as
investors held off on big moves ahead of the U.S. Thanksgiving
holiday on Thursday.
Spot gold was 0.2 percent higher at $1,224.13 per
ounce by 13:45 p.m. EST (1845 GMT) after hitting a one-week high
of $1,225.29 in the previous session. U.S. gold futures
settled up $2.30, or 0.2 percent, at $1,225.30.
The dollar fell to two-week lows after Federal Reserve
officials' comments about the U.S. economy suggested the central
bank may be nearing the end of its tightening cycle. A softer
dollar makes gold cheaper for holders of other currencies.
"There has been a lot of back and forth language (on)
whether or not the Federal Reserve will implement a neutral
interest rate or will they take it above neutral, temporarily,"
said David Song, an analyst at DailyFX.
"Markets are waiting for a little more clarity on (a
possible) December rate hike as well as the outlook for 2019.
Gold is taking a sideways approach in this environment."
Trading volumes are expected to remain subdued before
"I expect prices to consolidate around the $1,220 level
throughout the remainder of the week. There is not a lot of news
action in the market," said Phil Streible, senior commodities
strategist at RJO Futures in Chicago.
"We are expecting the Fed to raise interest rates at the
next meeting in December. Most likely that will keep gold from
getting above the recent highs."
Higher rates dampen the appeal of gold, which pays no
interest and incurs costs to store and insure.
Indicative of investor sentiment toward bullion, holdings of
SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, fell 0.2 percent to their lowest in a week
Hedge funds and money managers boosted their net short
position in gold to the highest in five weeks.
Palladium fell 1.4 percent to $1,160.70 per ounce,
after hitting a record high of $1,185.40 in the previous
"We still see palladium prices remaining supported at or
above recent levels for the next six months ... as demand
remains very firm, risk markets recover October losses, and
industrial metals receive a bid on the back of firmer Chinese
demand," JP Morgan analysts said in a note.
Silver rose 0.2 percent to $14.43 an ounce, while
platinum rose 0.8 percent to $853.50 per ounce.
(Reporting by Swati Verma and Nallur Sethuraman in Bengaluru
Editing by Richard Chang and Rosalba O'Brien)
First Published: 2018-11-19 03:27:11
Updated 2018-11-19 21:00:43
© 2018 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.