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PRECIOUS-Gold turns up as dollar falls from its highs

CommoditiesSep 12, 2017 15:20
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© Reuters. PRECIOUS-Gold turns up as dollar falls from its highs

* World equities hit record high for second straight day

* Concerns over Korea, Hurricane Irma recede

* Largest gold ETF sees first inflow since Sept. 5

* GRAPHIC-2017 asset returns: (Updates prices; adds comment, byline, NEW YORK dateline)

By Marcy Nicholson and Jan Harvey

NEW YORK/LONDON, Sept 12 (Reuters) - Gold bounced up from the lowest level in more than a week on Tuesday as the dollar pared gains and U.S. President Donald Trump said U.N. sanctions on North Korea are "nothing compared to what ultimately will have to happen."

Spot gold XAU= hit its lowest since Sept. 1 at $1,322.15 an ounce in early trade and was up 0.3 percent at $1,330.68 an ounce by 2:37 p.m. EDT (1837 GMT).

U.S. gold futures GCv1 settled down 0.2 percent at $1,332.70.

Gold prices turned positive after Trump said the latest U.N. sanctions on North Korea were only a very small step and nothing compared to what would have to happen to deal with the country's nuclear program. pretty aggressive rhetoric on his part and that's brought gold back up," said Bob Haberkorn, senior market strategist for RJO Futures in Chicago.

Gold rose to a one-year high last week, but slid 1.4 percent on Monday in its biggest one-day drop in two months as concerns eased about North Korea's nuclear ambitions and the impact of Hurricane Irma.

"It was the weakness of the dollar that was really driving gold, and the tensions with North Korea," Natixis analyst Bernard Dahdah said. "The rate at which the dollar can still depreciate is slowing down."

The dollar index .DXY came off its session highs but remained above Friday's 2-1/2-year low.

The S&P 500 .SPX and a gauge of global equity markets hit new highs as investors opted for nominally higher-risk assets over havens such as gold and the Japanese yen. MKTS/GLOB

"The market is likely to turn its attention to the Fed, with speakers now in blackout mode ahead of its policy meeting next week," ANZ said in a note.

The Federal Reserve has raised U.S. interest rates twice this year in response to upbeat growth data and falling unemployment, but persistently soft inflation figures have tempered expectations for another hike in December.

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

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares GLD , rose 1.2 tonnes on Monday, data from the fund showed, after three days of outflows. GOL/ETF

Among other precious metals, silver XAG= was up 0.3 percent at $17.85 an ounce after hitting its lowest since Sept. 1 at $17.67.

Platinum XPT= was down 0.5 percent at $985.20, while palladium XPD= was 1.8 percent higher at $948.30 an ounce.

PRECIOUS-Gold turns up as dollar falls from its highs

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Brad Smith
Brad Smith Sep 13, 2017 18:39
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I'm also curious if anyone tried calling the GLD hotline at 866▪320▪4053 in search of numerical details on GLD's insurance? The prospectus vaguely states "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." When I asked about how much of the gold was insured, the representative proceeded to act as if he didn't know and said they were just the "marketing agent" for GLD. What kind of marketing agent would not know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors.
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Brad Smith
Brad Smith Sep 13, 2017 18:37
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"GLD , rose 1.2 tonnes on Monday"..Jan Harvey, I frequently see you make these claims but can you finally provide any verifiable evidence to support them? How reliable are GLD's holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loophole in their prospectus that states they have no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this backdoor to the fund...I remember there was a highly publicized visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities.
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