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PRECIOUS-Gold gains, but set for biggest weekly loss in over a year

Published 18/08/2018, 04:08 am
© Reuters. PRECIOUS-Gold gains, but set for biggest weekly loss in over a year
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* Gold up on day but down 2.7 pct on the week

* Gold set for biggest weekly loss since May 2017

* Dollar falls from 13-month high, easing pressure on gold

* Silver, platinum, palladium set for weekly losses (Recasts headline, updates prices; adds comment, byline, adds NEW YORK dateline)

By Renita D. Young and Peter Hobson

NEW YORK/LONDON, Aug 17 (Reuters) - Gold recovered some ground on Friday as a weakening U.S. dollar relieved pressure on prices, but the precious metal remained near 19-month lows and looked poised for its biggest weekly drop since May 2017.

Spot gold XAU= added 0.31 percent to $1,177.21 ounce by 1:35 p.m. EDT (1735 GMT), but was down 2.7 percent this week in its sixth consecutive weekly loss. On Thursday, it touched $1,159.96, the lowest since January 2017.

U.S. gold futures GCcv1 for December delivery settled up 20 cents, or 0.02 percent, at $1,184.20 per ounce.

"The markets are very oversold and the dollar is overbought," said John Caruso of RJO Futures. "It looks like some of the shorts are trying to book some profits."

From a 13-month high on Wednesday against a basket of six major currencies .DXY , the dollar has weakened against the currencies of key gold markets, the euro zone and China, helping gold regain its footing, said ABN AMRO (AS:ABNd) analyst Georgette Boele.

"I expect the dollar to peak in the coming weeks ... Gold should bottom out here," she said.

Gold has tumbled 14 percent from its April high as a rally in the greenback made dollar-priced bullion more expensive for buyers using other currencies. FRX/ .DXY

Investors seeking a safe place to store assets amid trade disputes and a Turkish currency crisis have preferred the dollar to gold, undermining the reputation of bullion as a safe haven.

But news of planned U.S.-China trade talks and a partial recovery of Turkey's lira have steadied investors' nerves slightly. MKTS/GLOB TRY=

Bets on lower prices on the Comex exchange continue to build and now outweigh bets on higher prices by the largest quantity ever recorded. 3088691MNET

Pressure from speculators may ease, however, said Boele.

"Everyone who wants to be short is short, and if you are still long and have held your position all the way down, why would you sell here?"

In technicals, Fibonacci resistance was at $1,185.30 with support at the January 2017 low of $1,146.20, analysts at ScotiaMocatta said, adding that gold would likely fall further.

Meanwhile, silver XAG= gained 0.3 percent to $14.66 an ounce, but was down more than 4 percent on the week, the biggest weekly loss since February. On Thursday it touched its lowest since February 2016.

Platinum XPT= increased 0.2 percent to $778.40 an ounce and was set for its biggest weekly drop since November 2015 of about 6 percent. It hit a 10-year low on Thursday. XPD= gained 1.1 percent to $898.90 per ounce, but was down 1.4 percent this week having struck a one-year low.

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