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PRECIOUS-Gold prices slip as investors eye riskier assets

Published 2018-05-22, 02:22 a/m
Updated 2018-05-22, 02:22 a/m
© Reuters.  PRECIOUS-Gold prices slip as investors eye riskier assets

* Easing geopolitical risk negative for gold - analyst

* SPDR gold holdings down 0.4 pct on Monday

* Platinum edges up from five-month low hit on Monday

By Apeksha Nair

BENGALURU, May 22 (Reuters) - Gold prices dipped slightly on Tuesday, hovering not far off a 2018 low struck in the previous session as a firm dollar near five-month highs and optimism in global markets curbed appetite for the precious metal.

Spot gold XAU= was down 0.2 percent at $1,290 per ounce, as of 0614 GMT. In the previous session, it slid to $1,281.76, its lowest since Dec. 27.

U.S. gold futures GCcv1 for June delivery slipped 0.1 percent to $1289.8 per ounce.

"I think the overriding narrative here is where the dollar is going," said Stephen Innes, APAC trading head at OANDA. Abating geo-political risk was also weighing on sentiment for gold, he added.

The dollar traded below a five-month high against a basket of currencies on Tuesday, catching its breath after a broad rally inspired by rising U.S. bond yields and relief at an easing of U.S.-China trade tensions. USD/

Washington and Beijing both claimed victory on Monday as the world's two largest economies stepped back from the brink of a global trade war and agreed to hold further talks to boost U.S. exports to China. Asia-Pacific shares outside Japan .MIAPJ0000PUS extended gains on Tuesday amid renewed optimism about global growth after the U.S.-China agreement. MKTS/GLOB

Expectations that the Federal Reserve will lift U.S. interest rates again next month added to downward pressure on gold. Higher U.S. rates tend to boost the dollar and push bond yields up, make non-yielding assets like bullion less attractive. FEDWATCH

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U.S. Treasuries were steady on Monday, after benchmark yields rose to a seven-year peak last week, as investors awaited release of the latest Federal Reserve minutes on Wednesday.

Accelerating inflation means the Fed should hike interest rates two or possibly three more times this year, and could move as soon as next month, Philadelphia Fed President Patrick Harker said on Monday. around the $1,275 level we are going to start to attract more bullish sentiment, but in the mean time the driver is going to remain the U.S. dollar," Innes said.

Holdings in SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, fell 0.38 percent to 852.04 tonnes on Monday. other precious metals, silver XAG= slid 0.3 percent to $16.44 an ounce, while palladium XPD= was largely unchanged at $989.05 an ounce.

Platinum XPT= climbed 0.1 percent to $896.50 an ounce, after marking a fresh low for the year in the previous session at $873.50.

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