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PRECIOUS-Gold falls further from near 6-week peak on dollar bounce

Published 29/03/2018, 12:49 am
© Reuters.  PRECIOUS-Gold falls further from near 6-week peak on dollar bounce
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* Gold pulls back from Tuesday's near six-week peak

* Dollar recovers some lost ground; stocks under pressure

* GRAPHIC-2018 asset returns: http://tmsnrt.rs/2jvdmXl (Updates prices, adds comment)

By Jan Harvey

LONDON, March 28 (Reuters) - Gold fell on Wednesday as a dollar bounce on U.S. growth data pulled prices further from the previous day's near six-week peak, although softer equities markets kept it underpinned.

The dollar rose 0.4 percent against the euro after sliding to its lowest since mid-February on Tuesday, touching session highs after data showing U.S. economic growth slowed less than previously estimated in the fourth quarter. FRX/

Spot gold XAU= was down 0.8 percent at $1,333.44 an ounce at 1435 GMT, while U.S. gold futures GCcv1 for April delivery were down 0.7 percent at $1,337.90 an ounce.

"Despite the fact that the equity markets are near a cliff, we have not seen much interest amidst retail investors for gold and the strength of the dollar index is also weighing on the price," Think Markets chief market analyst Naeem Aslam said.

"However, given the geopolitical uncertainties we have, we do think that the path of least resistance is skewed to the upside."

Spot gold touched its highest since mid-February on Tuesday before ending down 0.6 percent, its biggest one-day loss in two weeks. Gold is set to close the first quarter up 3 percent.

Stocks softened again on Wednesday as persistent jitters about a U.S.-China trade war and the prospect of a regulatory crackdown on companies such as Facebook (NASDAQ:FB) left investors facing their first quarterly drop in stocks in two years. MKTS/GLOB

Holdings of the world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares GLD , fell 1.2 tonnes on Tuesday to 846.12 tonnes, data from the fund showed. So far this week it has seen outflows of 4.4 tonnes. GOL/ETF

Among other precious metals, silver XAG= was down 0.7 percent at $16.37 an ounce. The metal fell 1 percent on Tuesday after hitting a three-week high of $16.80 in early trade.

Platinum XPT= was down 0.4 percent at $939 an ounce, having fallen to its lowest since early January in the previous session at $935.

Palladium XPD= was down 0.1 percent at $973.30 an ounce. The autocatalyst metal is on track to end March down 6.6 percent, its biggest monthly loss since December 2016, and the first quarter down more than 8 percent.

Nonetheless, its underlying supply and demand picture suggests prices will remain supported, UBS said in a note, after the metal hit a record high in January.

"Palladium forwards remain firmly in backwardation, strong trade inflows into Hong Kong continue to be evident, and our factor-analysis suggests that the influence of fundamental factors on price action has increased over the past year," it said.

Backwardation is a situation in which a futures contract trades below the asset's expected price at the contract's maturity, and is often seen as a sign of market tightness.

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