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PRECIOUS-Gold rises on weaker dollar; platinum group metals surge

Published 10/08/2016, 05:19 pm
© Reuters.  PRECIOUS-Gold rises on weaker dollar; platinum group metals surge
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* U.S. worker productivity down for 3rd straight quarter

* Platinum touches highest in over 16 months

* Palladium rises to its best in 14 months

* Spot gold clears resistance at $1,346 - technicals (Updates prices, adds comment)

By Sethuraman N R

Aug 10 (Reuters) - Gold rose more than 1 percent on Wednesday as the dollar fell on lower expectations for a U.S. rate hike after weaker economic data, while platinum and palladium climbed to their highest in over a year.

Spot gold XAU= had risen 1.1 percent to $1,354.44 an ounce by 0653 GMT, after gaining 0.4 percent in the previous session.

U.S. gold GCcv1 was up 1 percent at $1,360.60 an ounce.

Spot palladium XPD= surged 7.4 percent to $746.10 an ounce, the highest since June 2015. Platinum XPT= was up 2.4 percent at $1,177.80, after rising to $1,182.20, its loftiest in over 16 months.

"The overall trend is positive in platinum group metals. Mine strikes and trade union problems in South Africa are supporting platinum prices and palladium is going with that," a Hong Kong-based precious metals trader said.

Platinum has risen over 32 percent so far this year, closely followed by palladium, which has gone up about 30 percent.

Gold, meanwhile, climbed after a report that U.S. worker productivity fell for a third straight quarter in the spring this year. a noisy trading without trend. With a falling dollar, we would see short term rise in gold and silver prices," said Jiang Shu, chief analyst at Shandong Gold Group.

"The dollar is due for a rising trend and the gold rally, although it has some short term upside, can't last very long."

The dollar index, which gauges the greenback against a basket of six major currencies, fell 0.3 percent to 95.891 .DXY .

"There did not seem like many sell orders on the way up, which had been a feature of the past few days post nonfarm payrolls data, with all the interest focused on the buy side," MKS PAMP Group senior precious metals dealer Alex Thorndike said in a note.

The unexpected drop in U.S. productivity may confirm the U.S. Federal Reserve's fears that the economy may slip into a period of slow growth, reducing the central bank's willingness to raise interest rates. is highly sensitive to rising U.S. interest rates, which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which the metal is priced.

Holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, fell for a second straight day on Tuesday. It slipped 0.12 percent to 972.62 tonnes from Monday. GOL/ETF

Spot silver XAG= was up 2 percent at $20.26 an ounce.

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