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PRECIOUS-Weaker dollar helps lift gold for second straight day

Published 29/06/2017, 04:26 am
© Reuters.  PRECIOUS-Weaker dollar helps lift gold for second straight day
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* U.S. dollar lowest since November

* Bond yields rise on Draghi comments

* Gold hovers around 100-day moving average (Updates prices; adds comment, byline, NEW YORK dateline)

By Marcy Nicholson and Peter Hobson

NEW YORK/LONDON, June 28 (Reuters) - Gold prices rose on Wednesday as the dollar weakened for a second straight day following a global cyber attack and a delay to U.S. healthcare legislation that fueled doubts about President Donald Trump's ability to pass measures expected to boost the economy. .EU .N dollar sank to its lowest level since November while the euro hit a one-year high after European Central Bank President Mario Draghi on Tuesday appeared to hint that stimulus could be trimmed this year, though sources later said he had been misinterpreted. FRX/ weaker greenback makes dollar-denominated bullion cheaper for holders of other currencies and can increase demand.

Spot gold XAU= was up 0.2 percent at $1,249.20 an ounce by 2:09 p.m. EDT (1809 GMT). It was on track to close June down 1.5 percent, but for the second quarter finish little changed.

U.S. gold futures GCcv1 settled up 0.2 percent at $1,249.10.

"For the remainder of this year we expect gold prices to profit slowly but surely from a weaker U.S. dollar and to rise at a modest pace," ABN Amro analyst Georgette Boele said. "Our year-end forecasts for 2017 and 2018 are $1,300 and $1,400 per ounce, respectively."

While the weak greenback was seen giving support to gold prices, rising yields on U.S. benchmark 10-year Treasury notes were seen preventing stronger gains.

The risk of a deeper stock market correction meant investors now wanted to keep their gold, said Ole Hansen, head of commodities strategy at Saxo Bank.

"With the selling appetite fading, it gives some room to the upside," he said.

Stock investors were also on edge after U.S. Federal Reserve Chair Janet Yellen said shares may be over-valued, Hansen said. bond yields rose after Draghi's comments on ECB stimulus, limiting the appeal of non-yielding bullion. US/ MKTS/GLOB

On the technical side, gold rose above its 100-day moving average. Fibonacci resistance was at $1,255.20, analysts at ScotiaMocatta said in a note.

"Expect to see prices perking up heading into the latter part of the week, especially if the combination of a weaker dollar and U.S. equity markets stays with us for a little while longer," said INTL FCStone analyst Edward Meir in a note.

Spot silver XAG= was up 0.9 percent at $16.81 an ounce.

Platinum XPT= was 0.5 percent higher at $921.30, and palladium XPD= was up 0.05 percent at $857.90.

The platinum market was heading for a third year of global surplus in 2017, consultancy CPM Group said in a report. It also said a surplus was expected in the palladium market.

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