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PRECIOUS-Gold stays above 2-wk low as investors await Fed

Published 23/08/2016, 05:16 pm
PRECIOUS-Gold stays above 2-wk low as investors await Fed
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* Gold could test $1,331.35 - technicals

* Silver off 7-week lows hit on Monday

* Silver, gold technicals look bearish

* Platinum near about 4-week lows touched Monday (Updates prices)

By Sethuraman N R

Aug 23 (Reuters) - Gold was mostly unchanged on Tuesday after hitting a two-week low in the previous session as the market waited for more clues from the U.S. Federal Reserve later this week on whether it will raise rates this year.

Spot gold XAU= was nearly flat at $1,338.86 an ounce at 0654 GMT. The metal hit a two-week low of $1,331.35 Monday.

U.S. gold GCcv1 was unchanged at $1,343 an ounce.

"People are worried that September rate hike is not completely ruled out as a possibility. Although the medium-to-long term prospects for a series of rate hikes is not really high, there should be some short-term pressure on gold," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.

"Investor's momentum has been lagging for some time. The exchange traded funds have not risen significantly and that should be a short-term bearish signal for gold," To said, adding that gold might soon test the level of $1,280-$1,300.

Spot gold may revisit its Aug. 22 low of $1,331.35 per ounce, as suggested by its wave pattern and a triangle, according to Reuters technical analyst Wang Tao. Federal Reserve Chair Janet Yellen may provide more clarity on an interest rate increase at a speech during an annual meeting of central bankers in Jackson Hole, Wyoming, starting on Aug. 25. The Fed last week sent mixed messages on an increase in its July meeting minutes, though some members have suggest rates could rise as soon as September. likely will see more weakness in the precious group at least until Fed Chair Yellen provides a little more clarity about the future course of interest rates on Friday," INTL FCStone analyst Edward Meir said in a note.

Gold is highly sensitive to rising U.S. interest rates, which boost the opportunity cost of holding non-yielding gold, while lifting the dollar, in which it is priced.

"Weaker charts patterns will likely be another negative, particularly in silver, which has now opened up a gap on charts," said Meir.

Spot silver XAG= was up 0.9 percent at $19.03 an ounce. It fell over 2 percent and hit an over seven-week low on Monday.

"We have been concerned about the speculative length that has been building up in silver for sometime now and so it its steeper decline relative to gold doesn't come as a surprise," Meir said.

Platinum XPT= edged higher 0.4 percent at $1,103.40, hovering near about four-week low hit in the previous session. Palladium XPD= rose 0.2 percent to $691.50.

Holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose 0.25 percent to 958.37 tonnes on Monday. GOL/ETF

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