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PRECIOUS-Gold up from 6-month lows on bargain hunting, weaker dollar

Published 30/06/2018, 04:17 am
© Reuters.  PRECIOUS-Gold up from 6-month lows on bargain hunting, weaker dollar
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* Spot gold on track for third weekly fall

* Gold down more than 5 pct this quarter

* Platinum headed for 8 pct quarterly decline (New throughout, updates prices, market activity and comments, adds second byline, NEW YORK dateline)

By Renita D. Young and Eric Onstad

NEW YORK/LONDON, June 29 (Reuters) - Gold prices rose on Friday from six-month lows as a weaker U.S. dollar prompted bargain hunting, but bullion was on track for weekly and monthly declines and analysts said many speculators maintained short positions, leaving prices vulnerable to further losses.

Spot gold XAU= added 0.4 percent at $1,252.81 an ounce by 1:34 p.m. EDT (1734 GMT). On Thursday, it touched $1,245.32, its lowest since Dec. 13, 2017.

U.S. gold futures GCcv1 for August delivery settled up $3.50, or 0.3 percent, at $1,254.50 per ounce.

"Gold is finding support from the weak U.S. dollar and firm euro...and is at least recouping the losses it incurred yesterday," Commerzbank (DE:CBKG) said in a note.

Despite Friday's gains, gold was down 1.2 percent so far this week, headed for a third straight weekly decline. For the month, spot gold was down about 3.4 percent, on track for its biggest monthly drop since November 2016.

"At the end of the month and end of the quarter, people try to buy gold to boost it," added Michael Matousek, head trader at U.S. Global Investors.

Both spot gold and platinum prices were headed for their weakest quarters since year-end 2016.

"The shorts are still in control and the momentum is negative. The dollar and U.S. Treasuries have taken over the role of safe haven this month and as long as the trade war is creating uncertainty then that will probably prevail," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Hansen said the downtrend would likely accelerate unless gold held above multiple support layers slightly below $1,240.

The euro EUR= increased after European Union leaders reached an agreement on migration. FRX/

A stronger euro potentially boosts gold demand by making dollar-priced bullion cheaper for European investors.

The dollar index slipped against a basket of currencies. .DXY

Meanwhile, spot silver XAG= gained 1.1 percent at $16.13 an ounce. It was heading for a 1.9 percent weekly drop and 1.4 percent monthly decline.

Palladium XPD= rose 0.7 percent at $951.45 an ounce. It was down 3.4 percent for the month, its weakest month since March.

Platinum XPT= added 0.2 percent at $849.24 per ounce. During the session it hit its lowest since January 2016 at $837.30. It was down 8 percent for the quarter and 5.8 percent for the month.

"Speculative financial investors are currently betting on falling platinum prices to a greater extent than ever before, and platinum ETFs have been seeing continual outflows for months," Commerzbank said in a note.

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