July 12, 2017 / 4:32 AM / in 2 months

PRECIOUS-Gold prices steady as investors await Yellen's testimony

    * Yellen to testify to Congress later on Wednesday and
Thursday
    * Spot gold still targets $1,225-$1,231/oz range -
technicals

 (Updates prices, adds comment)
    By Nithin ThomasPrasad
    BENGALURU, July 12 (Reuters) - Gold held steady on Wednesday
as investors awaited testimony from U.S. Federal Reserve Chair
Janet Yellen and central bank officials expressed caution about
further interest rate hikes.
    "Gold's near-term direction will now be at the mercy of
whether we get a hawkish Yellen on the Hill," said Jeffrey
Halley, senior market analyst at OANDA.
    Yellen is set to give her semi-annual monetary policy
testimony before Congress later on Wednesday and on Thursday,
and investors will be parsing it for clues on when the Fed will
start reducing its $4.5 trillion balance sheet, which would have
the effect of tightening U.S. money supply.
    Meanwhile, two of her colleagues cited low wage growth and
muted inflation as reasons for caution on further interest rate
increases.               
    Any pause in U.S. interest rate increases would be
beneficial for gold as investors seek returns in other assets.
While dollar-denominated commodities typically rise when the
greenback declines, reflecting the intrinsic value of the
commodity.
    Spot gold        rose 0.1 percent to $1,218.46 per ounce at
0719 GMT. 
     U.S. gold futures         for August delivery rose 0.3
percent to $1,217.70 per ounce.
    "I think we have hit the bottom for the short-term period
and we are trying to go back to the $1,230 level over the next
one to two months," said Yuichi Ikemizu, Tokyo branch manager at
ICBC Standard Bank, adding that the weaker dollar was supporting
bullion.
    The dollar edged down to 14-month lows against the euro in
Asian trading on Wednesday as investors, already wary ahead of
Yellen's testimony, digested emails released by President Donald
Trump's eldest son suggesting he welcomed Russia's help in last
year's election campaign.       
    Spot gold still targets a range between $1,225 and $1,231
per ounce, as suggested by its wave pattern and a Fibonacci
projection analysis, according to Reuters technical analyst,
Wang Tao.
    "We continue to expect (gold) prices to recover towards the
end of the year, as expectations for the Fed hiking cycle in
2018 to 2019 are scaled back, U.S. Treasury yields peak at lower
levels, the Fed balance-sheet adjustment is well telegraphed and
gradual, and India's seasonal demand materializes in September."
said Standard Chartered in a note.
    "We maintain the view that the outlook for prices appears
fragile in the near term."
    Among other precious metals, silver        rose 0.4 percent
to $15.84 per ounce.
    Palladium        gained 0.4 percent to $853.25 per ounce and
platinum        edged up 0.1 percent to $902.00 per ounce. 

 (Reporting by Nithin Prasad and Arpan Varghese in Bengaluru;
Editing by Christian Schmollinger)
  

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