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PRECIOUS-Gold set for biggest weekly fall in 5; firm dollar weighs

Published 2018-12-14, 03:58 a/m
© Reuters. PRECIOUS-Gold set for biggest weekly fall in 5; firm dollar weighs
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* Spot gold remains neutral in $1,240-$1,253 range - technicals

* Platinum set to post first weekly gain in six

By Eileen Soreng

BENGALURU, Dec 14 (Reuters) - Gold prices fell on Friday and were on track to mark their biggest weekly decline in five weeks due to a firmer dollar, as investor focus shifted towards an expected U.S. interest rate hike next week.

Spot gold XAU= was 0.3 percent lower at $1,238.32 per ounce as of 0837 GMT. Earlier in the session, prices hit their lowest level since Dec. 6 at $1,236.80.

The metal is down about 0.8 percent so far for the week.

U.S. gold futures GCv1 were down 0.38 percent at $1,242.6 per ounce.

There is some downward pressure from a stronger dollar, said Vandana Bharti, assistant vice-president of commodity research, SMC Comtrade Ltd.

"I don't see much downside on gold going forward... The market is waiting for a strong trigger and currently it's watching out for the Fed meeting."

The dollar index .DXY , which measures the greenback against a basket of six major currencies, was up about 0.2 percent. USD/

The U.S. central bank is widely expected to raise interest rates at its Dec. 18-19 meeting, its fourth rate hike this year, though greater focus will centre on the policy outlook for 2019, over which there is more uncertainty.

"Market sentiment towards zero-yielding gold is at risk of souring ahead of the Fed meeting next week where interest rates are expected to be hiked. However, with the Fed potentially taking a pause on rate hikes next year, gold remains somewhat supported," said Lukman Otunuga, a research analyst at FXTM.

"The near-term outlook for gold hangs on the dollar performance... Bulls remain safe above the $1,240 support level with $1,250.60 acting as a level of interest," Otunuga added.

Lower interest rates reduce the opportunity cost of holding bullion and weigh on the dollar.

Spot gold remains neutral in a range of $1,240-$1,253 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao. other precious metals, spot palladium XPD= was down about 1.6 percent at $1,239.70 per ounce, having hit an all-time high of $1,269.25 in the previous session. The metal was on track to mark third week of gains with prices up about 1.5 percent so far.

Silver XAG= fell 1 percent to $14.61 per ounce.

Platinum XPT= was down 0.1 percent at $792.60 per ounce and was set to post a weekly gain after declining for five weeks.

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