Gold dips but holds above $1,200/oz on softer dollar

By Marcy Nicholson and Clara Denina

NEW YORK/LONDON (Reuters) – Gold was down a shade on Tuesday, weighed by a brief bout of selling in choppy dealings after the metal had recovered from early losses that pulled it below $1,200 an ounce.

Spot gold (XAU=) was down 0.3 percent at $1,202.95 an ounce at 3:09 p.m. EST (2009 GMT), having dropped by nearly 1 percent to a session low of $1,194.90. The market again turned lower when it dropped nearly $7 within four minutes just before 11 a.m. EST for no apparent fundamental reason, traders said.

“Prices … seem to be forming a nice technical base in the low $1,190s,” Deutsche Boerse’s MNI senior analyst Tony Walters said.

U.S. gold for April delivery (GCcv1) lost $3.80 to settle at $1,204.40 an ounce, still a 1 percent rebound from an earlier low of $1,194.60.

“Gold … clearly found some support around $1,200 at the start of this month and people are still looking at U.S. data,” NRC Commodities analyst Andrey Kryuchenkov said.

Markets will be watching Friday’s U.S. non-farm payrolls numbers and next week’s launch of outright money-printing by the European Central Bank, he added.

Technically, the market appeared weak with the 100-day moving average maintaining resistance around $1,215.

“I think we can retest our recent low,” said Edward Meir, analyst for brokerage INTL FCStone in Connecticut.

The dollar fell from an 11-year peak hit versus a basket of currencies, helping demand for the metal.[FRX/]

Expectations for an increase in U.S. interest rates were likely to limit bullion’s gains in the short term, keeping it below Monday’s two-week high of $1,223.20.

“Despite most people swaying back and forth on the timing of the U.S. rate hike, there is still consensus that it will happen this year,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.

Seven of the Fed’s 17 members have said they at least want the option of a rate rise in June on the table, or have pushed in general for an earlier increase in the expectation that wages and inflation will turn higher. [ID:nL1N0W01X8]

Most analysts expect China’s gold imports via main conduit Hong Kong to recover this year but to stay below the record 1,158.16 tonnes imported in 2013.

Spot silver (XAG=) fell 0.9 percent at $16.22 an ounce, while palladium (XPD=) rose 0.1 percent to $827.50 an ounce and platinum (XPT=) edged 0.5 percent higher to $1,190 an ounce.

(Additional reporting by Manolo Serapio Jr in Singapore; Editing by Louise Heavens, David Evans and Meredith Mazzilli)

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