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PRECIOUS-Gold sticks near 2-week low on firm dollar, equities

Published 11/05/2016, 11:12 am
Updated 11/05/2016, 11:20 am
© Reuters. PRECIOUS-Gold sticks near 2-week low on firm dollar, equities
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MANILA, May 11 (Reuters) - Gold held not far off a two-week low early on Wednesday, pressured by a firmer dollar and equities as robust corporate earnings reports lifted global stocks.

FUNDAMENTALS

* Spot gold XAU= was little changed at $1,266.70 an ounce by 0044 GMT, after touching a low of $1,257.25 on Tuesday, its weakest since April 28.

* U.S. gold for June delivery GCcv1 gained 0.3 percent to $1,268.20 an ounce.

* Appetite for gold appeared to have eased after the metal failed to convincingly breach the $1,300 resistance level last week. But it was still up more than 19 percent for the year as expectations for a near-term increase in U.S. interest rates had eased.

* Gold, which reached a 15-month high of $1,303.60 on May 2, will find the $1,300 level a tough barrier, as the investment appetite seen so far this year is unlikely to be replicated when physical demand is so poor, ICBC Standard Bank analyst Tom Kendall said.

* "Looking ahead, we see limited upside for gold pricing given the limited room for the Fed to surprise to the downside, limited room for the dollar to depreciate, and limited room for China to drive (emerging markets) currency strength to contribute to dollar weakness," Goldman Sachs (NYSE:GS) said. The global gold hedge book grew by 18 tonnes in the fourth quarter, an industry report showed, and producers continued to hedge in 2016 to lock in a sharp price rise in the first quarter. For the top stories on metals and other news, click TOP/MTL or GOL

MARKET NEWS

* Asian stocks pulled away from eight-week lows a day after solid corporate earnings sparked a rally in global equities while the yen struggled amid intervention warnings from Tokyo in the wake of the currency's rapid rise. MKTS/GLOB

* The dollar .DXY was near two-week highs versus a basket of major currencies although dovish comments from core Federal Reserve members are still keeping the greenback on a leash. USD/

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