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PRECIOUS-Gold edges up as dollar dips from multi-month high

Published 2018-11-14, 02:10 a/m
Updated 2018-11-14, 02:10 a/m
© Reuters.  PRECIOUS-Gold edges up as dollar dips from multi-month high

© Reuters. PRECIOUS-Gold edges up as dollar dips from multi-month high

* Holdings of SPDR Gold Trust fell on Tuesday

* Spot gold may bounce to $1,211/oz -technicals

By Eileen Soreng

Nov 14 (Reuters) - Gold prices inched up on Wednesday as the U.S. dollar retreated from a 16-month high touched earlier in the week, easing amid a surge in the euro and sterling on a draft Brexit agreement.

Spot gold XAU= rose 0.1 percent to $1,202.85 per ounce at 0657 GMT. Prices had slipped to their lowest level since Oct. 11 at $1,195.90 in the previous session.

U.S. gold futures GCcv1 were up 0.2 percent at $1,203.9 per ounce.

"There has been some stalling in the U.S. dollar, the rise has eased helping gold to pick up," said John Sharma, an economist with National Australia Bank (NAB).

A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies.

"We are seeing investors and speculators snapping up gold because gold has the potential to go up to $1,230 to $1,240," Sharma added.

The dollar index .DXY , which measures the greenback against a basket of six major currencies, was down about 0.2 percent, pulling back from a 16-month high.

However, the selloff in the dollar has been due to the improved risk sentiment around a potential Brexit deal and not because of any deterioration in the fundamentals of the U.S. economy, analysts said. USD/

The British cabinet will meet at 1400 GMT on Wednesday to consider the withdrawal agreement after Britain struck a draft divorce deal with the European Union. yellow metal has fallen about 12 percent since hitting a peak in April as investors bought the dollar with the U.S.-China trade war unfolding against a background of higher U.S. interest rates.

"Safe haven appeal has dimmed amidst market reports on the resumption of U.S.-China trade negotiations to avert an escalation in import duties between the world's largest economies," Benjamin Lu, a commodities analyst with Phillip Futures, said in a note.

"Though gold prices have shown for a slight recovery, headwinds will plague the precious metal at the 1,212 mark."

Spot gold may bounce to $1,211 per ounce, as it has found a support around $1,195, said Reuters technical analyst Wang Tao. of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD , fell 0.11 percent to 761.16 tonnes on Tuesday. other precious metals, silver XAG= was up 0.1 percent to $13.99 per ounce.

Palladium XPD= fell 0.3 percent to $1,106.50 per ounce, while platinum XPT= was 0.3 percent higher at $837.40 an ounce.

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