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Gold crawls up on safe-haven support; dollar limits gains

Reuters  |  BENGALURU 

By Apeksha Nair

BENGALURU (Reuters) - Gold prices inched higher on Tuesday on safe-haven buying, but upside potential for the was capped by a firm dollar and outlook for further interest rate hikes in the

Spot gold rose 0.1 percent to $1,313.54 per ounce at 0325 GMT.

U.S. gold futures for June delivery were, however, down 0.4 percent at $1,313.40 per ounce.

The rising tensions in induced some safe-haven buying for gold earlier in the session, analysts said in a note.

Israeli troops shot dead dozens of Palestinian protesters on the border on Monday when the high-profile opening of the to in by the raised tension to boiling point after weeks of demonstrations.

"We're seeing little sparks of interests on the back of these issues but at the moment it doesn't look significant enough to raise concerns over the medium-term which support a more sustained level of safe-haven buying," said.

Meanwhile, a firmer dollar and stronger U.S. bond yields on Tuesday, after a Federal Reserve official backed the case for further interest rate hikes in United States, were limiting upside for gold. [USD/]

"The market's been waiting for the next rate hike by the Fed... and I think gold prices are going to remain under pressure till we get through that hike," Hynes said.

is widely expected to raise benchmark interest rates at its next policy meeting in June.

Higher interest rates tend to boost the dollar and push bond yields up, making greenback-denominated gold more expensive for other holders and denting its non-yielding appeal.

The U.S. yield curve could invert later this year or early 2019, St. Louis Federal Reserve said on Monday, a scenario which has preceded recent U.S. recessions.

Elsewhere, three policymakers stuck with an upbeat assessment of the euro zone economy on Monday, shrugging off signs of a slowdown in inflation and activity.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.17 percent to 856.17 tonnes on Monday.

Spot gold may retest a support at $1,302 per ounce, said.

In other precious metals, silver was unchanged at $16.50 per ounce. rose 0.2 percent to $906.50 per ounce, while palladium was 0.1 percent lower at $994.50.

(Reporting by in Bengaluru; Editing by Sunil Nair)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 15 2018. 09:23 IST