PRECIOUS-Gold steadies as dollar weakens further

  • Reuters
  • Forex News
PRECIOUS-Gold steadies as dollar weakens further

* Cautious FOMC minutes send dollar lower in holiday week

* Chinese stocks slide dampens risk appetite

* Markets in United States, Japan closed on Thursday (Updates price movements)

By Maytaal Angel and Ethan Lou

LONDON/CALGARY, Alberta, Nov 23 (Reuters) - Gold prices steadied on Thursday to trade nearly flat after rising nearly 1 percent in the previous session as the dollar extended its swoon amid reduced expectations for U.S. interest rate hikes next year.

The dollar suffered its biggest drop in five months on Wednesday after minutes from the U.S. Federal Reserve showed "many participants" were concerned inflation would stay below the bank's 2 percent target for longer than expected. FRX/

The greenback was still nursing losses on Thursday, supporting dollar-priced gold by making it cheaper for non-U.S. investors.

Spot gold XAU= settled 0.1 percent lower at $1,290.80 per ounce on Thursday.

U.S. gold futures GCcv1 for December delivery were 0.1 percent lower at $1,290.70.

"Gold is obviously still in need of a spark, but we still see a chance of it reaching our year-end target of $1,325," said Ole Hansen, head of commodity strategy at Saxo Bank.

"The outlook for inflation is still low, long yields will remain subdued and then we have geopolitical risks rising this year. That's enough to prompt investors to buy gold, even though the growth outlook is still strong across the world."

Trading was lighter than usual on Thursday, with Japanese financial markets shut for a public holiday and U.S. markets closed for the Thanksgiving holiday.

In other precious metals, silver XAG= slipped 0.5 percent to $17.07 an ounce, platinum XPT= fell 0.6 percent to $933 an ounce, while palladium XPD= was up 0.7 percent at $1,010 an ounce.

In global markets, Chinese stocks suffered their biggest fall in almost two years, weighing on global equities, denting risk appetite and providing underlying support for gold, broadly seen as a safe-haven asset. MKTS/GLOB

With Chinese stocks falling, low-yielding currencies - such as the Japanese yen and the Swiss franc - remained firmly supported against the dollar.

Earlier this week, Fed Chair Janet Yellen stuck by her prediction that U.S. inflation would soon rebound, but offered an unusually strong caveat that she was "very uncertain" about this and open to the possibility that prices could remain low for years to come. of the largest gold-backed, exchange-traded fund (ETF), New York's SPDR Gold Trust GLD, and the largest silver-backed ETF, New York's iShares Silver Trust (NYSE: SLV ) SLV, were unchanged on Wednesday. gold may test a support at $1,283 per ounce as it failed to break resistance at $1,297, according to Reuters technical analyst Wang Tao.

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