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PRECIOUS-Gold prices hold gains in wake of weaker dollar

Published 24/05/2018, 04:34 pm
Updated 24/05/2018, 04:40 pm
PRECIOUS-Gold prices hold gains in wake of weaker dollar

* Fed minutes depict a less aggressive rate hike approach

* Dollar hits over one-week low vs yen

* Platinum to continue trading at discount to gold -analysts (Adds comment, updates prices)

By Apeksha Nair

BENGALURU, May 24 (Reuters) - Gold prices on Thursday held gains from the previous session, buoyed as the dollar extended losses after minutes of the latest U.S. Federal Reserve meeting hinted at a dovish approach to interest rate hikes.

Spot gold XAU= had edged up 0.1 percent to $1,293.93 per ounce by 0612 GMT, after gaining nearly 0.2 percent in the previous session.

U.S. gold futures GCcv1 for June delivery were up 0.3 percent at $1,293.30 per ounce.

"The minutes had a little bit of an impact but not too much. Gold is moving relative to the dollar," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

The dollar lost momentum versus the yen JPY= and against major rivals .DXY on Thursday after the Fed's minutes were seen as dovish and as U.S. President Donald Trump proposed looking into imposing new tariffs on imported cars. USD/ the central bank's minutes on Wednesday showed another interest rate hike in the United States would be warranted "soon", it also showed that the Fed would tolerate inflation rising above its target for a time. higher U.S. rates tend to boost the dollar and drag on greenback-denominated gold, the metal can be used as a hedge against rising inflation.

Meanwhile, the euro hovered near a six-month low against the dollar, weighed down by concerns over economic slowdown in the single currency bloc and political risks in Italy. Asian shares were treading water as investors fretted about new setbacks in U.S.-China trade talks. also said on Wednesday he would know next week whether his summit with North Korean leader Kim Jong Un would take place as scheduled, casting further doubts on plans for the unprecedented meeting. is often seen as a safe investment during times of political and financial uncertainty, alongside the Japanese yen.

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"With the trade picture looking increasingly cloudy ... we could see further yen strengthening and equity weakness which is typically bullish for gold," INTL FCStone analyst Edward Meir said in a note.

"A recovery back over the $1,300 per ounce mark could prompt further short-covering," Meir added.

Among other precious metals, silver XAG= was little changed at $16.42 an ounce. Platinum XPT= gained 0.7 percent to $905.30 an ounce, while palladium XPD= rose 0.2 percent to 978.40 an ounce.

Analysts at Standard Chartered (LON:STAN) on Wednesday said they expected platinum to continue to trade at a discount to both palladium and gold this year.

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