PRECIOUS-Gold gains after sharp sell-off as dollar takes breather
* U.S. job openings surge to new record high
* Spot gold may revisit Monday low of $1,684.37/oz – technicals
* Silver rebounds from an eight-month low (Recasts, adds comments, updates prices)
Aug 10 (Reuters) – Gold prices edged higher on Tuesday, after touching a four-month low in the previous session, as the dollar paused its rally, spurring demand for the safe-haven metal.
A stronger dollar makes gold more expensive to holders of other currencies.
Spot gold was up 0.3% at $1,734.31 per ounce by 0314 GMT. On Monday, prices touched $1,684.37, their lowest since March 31.
U.S. gold futures rose 0.5% to $1,735.60.
“The gold market is just digesting and consolidating after an aggressive bout of volatility,” said DailyFX currency strategist Ilya Spivak.
The expectation of the Fed leaning towards the tapering of stimulus measures and then eventually raising interest rates after the strong U.S. jobs report last week is weighing on gold prices, Spivak added.
The dollar index held steady against its rivals after solid gains in the last two sessions.
Two Federal Reserve officials said the U.S. economy is growing rapidly and while the labour market still has room for improvement, inflation is already at a level that could satisfy one leg of a key test for the beginning of interest rate hikes.
Though gold is viewed as a hedge against higher inflation, a Fed rate hike would dull its appeal as it increases the opportunity cost of holding the non-yielding metal.
Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.2% to 1,023.54 tonnes on Monday.
On the technical front, spot gold may revisit its Monday low of $1,684.37 per ounce, driven by a wave C, according to Reuters technical analyst Wang Tao.
Elsewhere, silver gained 0.5% at $23.55 per ounce after falling to an eight-month low in the previous session.
Platinum edged 0.3% higher to $983.01 and palladium rose 0.4% to $2,611.75.
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