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PRECIOUS-Gold edges higher as dollar rally pauses, silver slides

Published 13/07/2018, 04:33 am
© Reuters. PRECIOUS-Gold edges higher as dollar rally pauses, silver slides
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* Silver slips to weakest since December

* Platinum falls to one-week low (New throughout, updates prices, market activity and comments; adds second byline and NEW YORK dateline)

By Renita D. Young and Maytaal Angel

NEW YORK/LONDON, July 12 (Reuters) - Gold edged higher on Thursday as the dollar eased off a six-month high against the Japanese yen, but bullion failed to gain traction as traders said U.S.-China trade tensions so far were boosting the U.S. currency instead of the precious metal.

Stock markets and commodities gained after a turbulent session on Wednesday when the United States ratcheted up trade war threats on China, while the greenback held at lofty levels but was little changed on the day. FRX/ MKTS/GLOB

The dollar index .DXY , which measures the greenback against a basket of six currencies, was flat in the North American session near its highest since July 3.

Some market watchers said the dollar may have peaked for now, especially if the U.S. economy shows signs of weakness and the Federal Reserve slows the pace of interest-rate hikes. If the dollar weakens, dollar-priced gold would be cheaper for non-U.S. investors.

"The (gold) market is lacking direction and very technical in its characteristics," said Alasdair Macleod, head of research at Goldmoney.com.

Looking ahead, "gold could go marginally better. There are signs that the U.S. economy may be slowing down a bit and if that's so, we can expect the Fed to take its foot off the interest rate pedal a bit," Macleod said.

Spot gold XAU= gained 0.4 percent, trading at $1,247.07 per ounce by 1:35 p.m. EDT (1735 GMT). On Wednesday, gold slipped 1 percent to hit its lowest in over a week at $1,240.89.

U.S. gold futures GCcv1 for August delivery settled up $2.20, or 0.2 percent, at $1,246.60 per ounce.

U.S. consumer prices barely rose in June, but the underlying trend kept pointing to a steady buildup of inflation pressures that could keep the Fed on a path of gradual interest rate increases. remained focused on the U.S.-China trade conflict. They often turn to bullion as a safe haven in times of political uncertainty, but have not done so this time around.

"The technicals don't look good. It looks like gold will remain under pressure," said Chris Gaffney, president of world markets at TIAA Bank. "We could see gold lose that $1,200 handle."

Silver XAG= declined 1.4 percent at $15.97 an ounce. Earlier in the session it fell to its lowest since mid-December at $15.72 an ounce.

Platinum XPT= increased 1.5 percent at $837.25 an ounce, after falling to a more than one week low at $821.25 earlier. Palladium XPD= gained 1.2 percent at $949.10 per ounce.

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