Off The Wire
PRECIOUS-Gold slips, pressured by strong dollar outlook
* Strong U.S. data suggests interest rates will rise
* Gold finds strong resistance at $1,200 -ANZ
* Palladium off multi-week highs hit on Monday
(Recasts, adds quotes and detail, updates prices, changes dateline)
By Maytaal Angel
LONDON, Sept 11 (Reuters) - Gold dipped on Tuesday even though the dollar remained flat against a basket of currencies, with investors concerned the greenback could resume its rally amid looming interest rate increases and escalating Sino-U.S. trade tensions.
Since its April peak gold has dropped more than 12 percent, losing its safe-haven status to the U.S. dollar, a strengthening of which makes gold costlier for non-U.S. investors. That has prompted investors to raise their bearish bets on Comex gold and liquidate exchange-traded gold funds. "(There's) a generally strong dollar backdrop, which is keeping the precious metal under pressure. The market is very short gold futures," said ICBC Standard Bank analyst Marcus Garvey.
He added, however, that financial positions are becoming so short that it would not take much of a surprise to spark a short-covering rally.
"There's a good chance gold recovers back to $1,200 and possibly a bit higher," Garvey said.
Spot gold dipped 0.2 percent to $1,192.86 an ounce at 1006 GMT while U.S. gold futures dipped 0.1 percent to $1,198.50.
The dollar was flat versus a currency basket, with the euro underpinned by easing concerns over Italian debt and the British pound near five-week highs on hopes of a Brexit deal with the European Union. Underpinning the dollar, however, U.S. President Donald Trump raised trade tensions on Friday by saying he is ready to impose tariffs on virtually all Chinese imports to the United States. Furthermore, U.S. payrolls data last week cemented expectations that the Federal Reserve will raise U.S. interest rates in September. That would be the third increase this year, with expectations of another in December. Higher interest rates increase bond yields, making non-yielding bullion less attractive.
The metal is finding strong resistance at $1,200, with investors selling into any rallies that threaten to push it above that level, ANZ analysts said in a research note.
Physical gold buying waned slightly in Asia this week as investors waited to see if prices would fall further, traders said.
In other precious metals, silver fell 0.3 percent to $14.09 an ounce, platinum firmed by 0.4 percent to $785.90 and palladium was down 0.6 percent at $969.55 after hitting its highest in nearly 12 weeks at $991.15.
(Additional reporting by Nallur Sethuraman in Bengaluru Editing by David Goodman)Messaging: email@example.com) ))