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PRECIOUS-Gold steadies as lower shares offset higher dollar

Published 2016-08-03, 06:31 a/m
© Reuters.  PRECIOUS-Gold steadies as lower shares offset higher dollar

* Investors await U.S. non-farm payrolls on Friday

* Platinum, palladium retreat from multi-month highs

* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates throughout, changes dateline from BENGALURU)

By Clara Denina

LONDON, Aug 3 (Reuters) - Gold was little changed on Wednesday, hovering close to a three-week high hit in the previous session, as the impact of lower European share markets was offset by a steadier dollar.

Spot gold XAU= was up 0.1 percent at $1,364.00 an ounce by 1012 GMT. It hit $1,367.33, its highest since July 11, on Tuesday.

European shares edged down, following heftier losses in Asian markets, while the dollar recovered from Tuesday's six-week low, up 0.2 percent against a basket of currencies. MKTS/GLOB

A higher dollar makes gold more expensive for foreign currency holders, while an increase in risk appetite curtails interest in the metal, seen as a safer bet.

The dollar suffered after weak U.S. economic data undermined expectations of a near-term interest rate hike.

A report from the U.S. Commerce Department on Tuesday showed inflation was still muted in the country, which together with the anaemic economic growth pace in the second quarter, could encourage a cautious Federal Reserve to keep interest rates at current levels for a while. increase in U.S. interest rates would lift the opportunity cost of holding gold, which has surged about 28 percent this year on expectations the Fed would keep them unchanged.

Investor attention will now shift towards the monthly U.S. non-farm payrolls report, due on Friday.

"The weaker dollar this has helped lift the commodity complex with the exception of oil this year, but our expectation is that the U.S. economy remains on track for reasonable growth," Oxford Economics commodity director Daniel Smith said.

"Notwithstanding a really poor GDP print, there is a probability that non-farm payrolls will be very good and that brings back rate hikes back on the agenda and therefore the dollar will strengthen and gold will come off."

Spot gold may retrace moderately to a support at $1,358 per ounce before retesting a resistance at $1,368, as suggested by its wave pattern and a Fibonacci projection analysis, Reuters technical analyst Wang Tao said. of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose 0.6 percent to 969.97 tonnes on Tuesday. GOL/ETF

Among other precious metals, spot platinum XPT= fell 0.5 percent to $1,159 per ounce, after touching $1,177.40, its highest since April 2015, in the previous session.

Spot palladium XPD= fell 1.5 percent to $703.75 per ounce, after rising to $722.90 on Tuesday, the highest since June 2015.

Spot silver XAG= was unchanged at $20.58 per ounce, a day after touching a four-week high of $20.78.

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GRAPHIC-2016 asset returns:

http://reut.rs/1WAiOSC

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting By Nallur Sethuraman and Koustav Samanta in Bengaluru; Editing by David Evans)

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