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PRECIOUS-Gold extends gains even as Asian shares bounce back

Published 07/07/2016, 05:07 pm
© Reuters.  PRECIOUS-Gold extends gains even as Asian shares bounce back
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* Investors cautious ahead of US non-farm payroll data on Friday

* Gold trades below Wednesday's over 2-year high (Updates prices)

By Sethuraman N R

BENGALURU, July 7 (Reuters) - Gold rose for a seventh straight session on Thursday after touching its highest in more than two years in the previous session, with investors still seeking safe-haven assets even as stock markets bounced back in Asian trade.

Asian share markets crept ahead on Thursday after upbeat U.S. economic data took some of the sting out of the latest Brexit scare, while the Australian dollar briefly dipped as the country's triple A credit rating came under threat. MKTS/GLOB

Wall Street got a boost from Institute for Supply Management data showing U.S. service sector activity hit a seven-month high in June as new orders surged and companies hired more workers. gold XAU= , which touched its highest since March 2014 at $1,374.91 on Wednesday, was trading up 0.3 percent at $1,366.86 an ounce by 0644 GMT.

U.S. gold GCcv1 was up 0.1 percent at $1,369.

"Everyone is waiting for the U.S. non-farm payroll data for June due on Friday. Hence, not many people are trading and hence prices are stable," said William Wong, assistant head of dealing for Wing Fung's precious metals desk.

Investors will be watching out for the data following a slowdown in hiring during May. A further weakness in hiring could be an indication that the U.S. Federal Reserve may not raise interest rates anytime soon amid the economic uncertainty following the Brexit vote.

Fed policymakers in June decided that interest rate hikes should stay on hold until they have a handle on the consequences of Britain's vote on EU membership, according to the minutes from the Fed's June policy meeting released on Wednesday. is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.

"While we expect gold to keep moving higher, we detect that it is running into increased profit taking. Also how much more safe-haven demand and Brexit-related-buying gold is likely to receive in the short term are both unclear," HSBC analyst James Steel said in a note.

The immediate resistance for gold is on the topside of $1,375.50 an ounce while immediate support lies around $1,365 and then $1,357-58, MKS Group trader James Gardiner wrote in a note.

Holdings in SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, fell 0.03 percent to 982.44 tonnes on Wednesday. GOL/ETF

Silver XAG= was up 0.1 percent at $20.08.

Among other precious metals, platinum XPT= and

Palladium XPD= were steady at $1,083.74 an ounce and $604.90 an ounce respectively.

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