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CORRECTED-PRECIOUS-Gold pressured by Fed rate hike prospects

Published 24/10/2016, 07:12 pm
© Reuters.  CORRECTED-PRECIOUS-Gold pressured by Fed rate hike prospects
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(Corrects percentage change in 2nd paragraph to 0.09 from 0.9)

* Speculators cut net long's in gold

* Bullion could retest support at $1,261/oz - Technicals

* Platinum off near 8-month lows hit Friday

By Apeksha Nair

Oct 24 (Reuters) - Gold prices held within a narrow range on Monday as markets awaited further clues on the timing of an interest hike by the U.S. Federal Reserve.

Spot gold XAU= was down 0.09 percent at $1,265.68 an ounce at 0745 GMT, while U.S. gold futures GCcv1 was down 0.1 percent at $1,266.40 an ounce.

"Given the risk is just going to be increased, most people are going to liquidate a part of their holdings, just to place themselves in a safer position," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.

"Ahead of the U.S. elections results, it will move around the level $1,250 to $1,270 without much momentum to go up," he added.

Third-quarter growth figures from the United States and Fed policymakers speeches due this week will be closely watched by the market for clues on a possible interest rate hike. funds and money managers cut their net long positions in COMEX gold for a third straight week in the week to Oct. 18, U.S. Commodity Futures Trading Commission data showed on Friday. Francisco Fed President John Williams on Friday redoubled his call for raising rates soon, telling reporters after a speech here that "this year would be good" for a rate rise that he had wanted to take effect last month. is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.

"People are watching the U.S. elections and the data is on the positive side, favourable for a rate hike. As long as prices stay below the $1,300 mark, the downward trend might continue," said Hareesh V, research head of Geofin Comtrade Ltd.

"Prices need to break convincingly above the $1,300 level for a strong upside movement."

Spot gold is biased to retest a support at $1,261 per ounce, a break below which could cause a loss to $1,251, according to Reuters technical analyst Wang Tao. XAG= was up 0.1 percent at $17.63 an ounce.

Platinum XPT= was up nearly 1 percent at $938.00 an ounce. In the previous session, it touched a low of $921.20, its lowest level since Feb. 29.

Palladium XPD= , which touched a more-than-three-month low of $613.10 in the previous session, rose 0.16 percent at $629.00.

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