PRECIOUS-Gold hits near seven-week high as dollar, stocks slip

By Reuters Editorial / June 06, 2017 / www.reuters.com / Article Link

* Dollar hits seven-month low against basket of currencies* Palladium hits fresh high since Sept. 2014* Silver marks highest since April 25 (Updates prices, adds quote)By Vijaykumar VedalaBENGALURU, June 6 Gold touched its highest innear seven weeks on Tuesday as Asian stock markets and thedollar weakened ahead of a UK national election and a EuropeanCentral Bank meeting due later this week. James Comey, former head of the U.S. Federal Bureau ofInvestigation, is due to appear before a Senate committee forthe first time on Thursday. Comey was fired by President DonaldTrump in May while leading a probe into alleged Russian meddlingin last year's U.S. election.The events all have the potential to boost the safe-havenappeal of bullion, which is often used as an investment optionduring times of political and financial uncertainty. "Much will, of course, depend on the U.S. dollar. However, with event risk in the form of this Thursday's ECB rate decisionand the UK general election, one would expect the safe haven bidto be alive and well as the week progresses," said JeffreyHalley, a senior market analyst at OANDA. Spot goldrose 0.8 percent to $1,289.20 per ounce, asof 0805 GMT. Earlier in the session, it hit a peak of $1,289.67an ounce, its highest level since April 19. U.S. gold futures climbed 0.7 percent to $1,291.8 anounce. "Generally light positioning and numerous upcominggeopolitical events should continue to underpin demand for themetal, with targets extending to the 2017 high around $1,295 andthe psychological level of $1,300 above this," Sam Laughlin,senior precious metals trader at MKS, said in a note.In Britain, Prime Minister Theresa May's lead over theopposition Labour Party has narrowed to just 1 percentage point,according to a poll by Survation for ITV television on Monday. The vote is now expected to be much tighter than previouslypredicted."A decent win for the incumbent should ease any geopoliticalfears. A hung parliament or a move towards the Labour Partycould lead to some uncertainty fuelling gold prices," saidNational Australia Bank analyst John Sharma. Meanwhile, ECB policymakers are set to take a more benignview of the economy when they meet on Thursday and will evendiscuss dropping some of their pledges to ramp up stimulus ifneeded, four sources with direct knowledge of the discussionstold Reuters last week.In the wider markets, MSCI's broadest index of Asia-Pacificshares outside Japan fell 0.3 percent, while thedollar index touched a seven-month low against a basket of majorcurrencies.Among other precious metals, palladiummarked itsstrongest since Sept. 11, 2014, at $850 an ounce, and silver hit a high of $17.682 an ounce, its highest since April25. Platinumgained as much as 0.8 pct at $958.05. (Reporting by Vijaykumar Vedala in BENGALURU, with additionalreporting by Koustav Samanta; Editing by Tom Hogue and SherryJacob-Phillips)

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