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PRECIOUS-Volatile gold slips as investors cash out, dollar strengthens

Published 11/08/2016, 05:10 pm
© Reuters.  PRECIOUS-Volatile gold slips as investors cash out, dollar strengthens
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* Dollar recovers from near one-week lows hit Wednesday

* Gold may fall into a range of $1,334-$1,339 - technicals (Updates prices)

By Koustav Samanta and Sethuraman N R

Aug 11 (Reuters) - Gold fell on Thursday for the first time after rising in the previous two sessions, as investors cashed in recent gains and a recovery in the dollar added to the metal's current volatility.

Spot gold XAU= fell 0.3 percent to $1,342.58 an ounce at 0646 GMT. On Wednesday, the yellow metal went up as much as 1.3 percent, touching a high of $1,357.17.

U.S. gold GCcv1 slipped 0.3 percent to $1,348.30 an ounce.

"The profit-taking is triggered by people's changing expectations because of the mismatch between different central bank moves," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.

Supported by positive economic data, investors expect the U.S. Federal Reserve to raise rates in December, but other countries are increasingly looking to raise stimulus. The Reserve Bank of New Zealand cut rates on Thursday. think that kind of divergence between the Fed and the other central banks is making the so called optimism in gold prices wait for a little longer."

The dollar index .DXY , which measures the greenback's value against a basket of major currencies, rose on Thursday after touching a near one-week low of 95.442 on Wednesday. It was up nearly 0.1 percent at 95.733.

Spot gold may fall into a range of $1,334-$1,339 per ounce, as per Fibonacci projection analysis, according to Reuters technical analyst Wang Tao. is difficult to get a clear handle on the short-term direction of gold, as the complex seems to be teeing off on dollar weakness and what seems to us to be general complacency about the central banks being reluctant to take hawkish action on the rate front," INTL FCStone analyst Edward Meir said in a note.

"However, strong U.S. macro numbers or rebounding equities could change this calculus, since they raise the spectre of higher rates and alternative investments with potentially better returns."

Gold is highly sensitive to rising U.S. interest rates, which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which the metal is priced.

Asian shares fell on Thursday, reversing recent gains following losses on Wall Street, though regional currencies rose after Beijing let the Chinese yuan strengthen. MKTS/GLOB

Platinum XPT= was flat at $1,172. It hit a more than 17-month high on Wednesday. Palladium XPD= fell 0.5 percent to $719.50 after rising to a near 14-month high on Wednesday.

Platinum group metals could not retain their elevated levels on Wednesday and succumbed to profit-taking, MKS PAMP group trader Jason Cerisola said.

Silver XAG= edged lower by 0.2 percent at $20.03 an ounce.

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