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Gold falls further from 14-mth peak as dollar firms before Fed meeting

Credit: REUTERS/JAMAL SAIDI

Gold retreated further on Monday from a 14-month peak hit in the previous session as the dollar strengthened on strong U.S. retail sales data before the U.S. Federal Reserve meeting this week.

By Eileen Soreng

June 17 (Reuters) - Gold retreated further on Monday from a 14-month peak hit in the previous session as the dollar strengthened on strong U.S. retail sales data before the U.S. Federal Reserve meeting this week.

Spot gold XAU= was down 0.6% at $1,333.81 per ounce at 0946 GMT. Gold had hit $1,358.04 on Friday, its highest since April 11, 2018.

U.S. gold futures GCcv1 slipped 0.5% to $1,341.70 an ounce.

"After weeks of positive movement we are seeing a correction in gold prices, however, the trend remains positive," said ActivTrades analyst Carlo Alberto De Casa.

People are also waiting for any news coming from the U.S. central bank, De Casa said, adding that investors are betting on one and even two rate cuts this year and it would be a good signal for gold if Fed Chair Jerome Powell could confirm that.

Expectations of a rate cut at the U.S. Fed's June 18-19 meeting fell to 21.7% from 28.3% on Thursday after the retail data, according to CME Group's FedWatch tool. But bets for monetary easing at the July meeting remain at 85%.

Also weighing on bullion's appeal was a firmer dollar .DXY, which was holding near a two-week high as strong economic data last week led investors to reassess whether the Fed will sound as dovish as expected at this week's meeting. USD/

Spot gold may retest a support at $1,337 per ounce, a break below this level could result in a fall to $1,324, according to Reuters technical analyst Wang Tao.

The U.S. Trade Representative's Office on Monday will kick off seven days of testimony from U.S. retailers, manufacturers and other businesses about President Donald Trump's plan to hit another $300 billion worth of Chinese goods with tariffs.

"U.S.-China trade tension is supportive factor for the gold market, the unresolved trade dispute and any escalation is likely to increase demand for gold," said Michael McCarthy, chief market strategist, CMC Markets.

Holdings of SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, rose 0.6% to 764.10 tonnes on Friday from 759.70 tonnes on Thursday. GOL/ETF

Hedge funds and money managers also raised their net long positions in COMEX gold in the week to June 11, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Silver XAG= fell 0.5% to $14.79 per ounce, while platinum XPT= was steady at $798.74.

Palladium XPD= dipped 0.3% to $1,460.30 per ounce.

(Reporting by Eileen Soreng and Brijesh Patel in Bengaluru. Editing by Jane Merriman)

((eileen.soreng@thomsonreuters.com; Within U.S. +1 651 848 5832, Outside U.S. +91 80 6749 6131; Reuters Messaging: eileen.soreng.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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