PRECIOUS-Gold inches down as stronger dollar offsets weak stocks
* Spot gold faces strong resistance at $1,238/oz- technicals
* Speculators cut net short position in week to Oct. 23
(Updates prices)
By Vijaykumar Vedala
BENGALURU, Oct 29 (Reuters) - Gold prices edged lower onMonday as the dollar firmed, but the metal moved in a narrowrange as worries over U.S. corporate earnings and a slowdown inglobal economic growth weighed on Asian shares.
Spot gold was down 0.2 percent $1,230.68 an ounce at0807 GMT, with prices moving in a range of $6. On Friday, ittouched its highest since July 17 at $1,243.32. U.S. goldfutures were down 0.3 percent at $1,232.70 an ounce.
"There are two camps diverging around the likely performanceof the stock market, particularly in the short-term which iscreating a push and pull for the gold market where we have seensome interest return on the back of those losses," ANZ analystDaniel Hynes said.
"But the flow hasn't been completely one-way and there isstill some caution around the sell-off being potentiallyshort-lived. And that has resulted in investors not fullyswitching out of equity markets into gold."
Worries about China's slowing economy spread across Asianmarkets on Monday with U.S. stock futures turning down andChinese shares in the red as concerns about U.S. corporateearnings and global growth continued to hit the tradingsentiment. "Much of what will transpire in gold over the course of thecoming week will ride on the tone of the U.S. stock market,"INTL FCStone analyst Edward Meir said.
"Obviously, if the decline continues, gold should likelywork higher, but the strength in the dollar is somewhatsurprising and seems to be capping a more robust rally."
Gold prices have gained more than 6 percent after decliningto $1,159.96 an ounce mid-August, the lowest since January 2017.
However, the yellow metal has declined nearly 10 percentfrom its April peak after investors preferred the dollar as theU.S.-China trade war unfolded against a background of higherU.S. interest rates.
The dollar edged higher against a basket of its key rivals on Monday, and was not far off a 10-week high hit onFriday after data showed U.S. economic growth slowed less thanexpected.
"The push in the dollar index is pushing gold prices littlebit lower. But gold prices are still very solid (at theircurrent levels)," Think Markets UK chief markets analyst NaeemAslam said.
Spot gold faces a strong resistance at $1,238 per ounce andit may either hover below this level or retrace towards asupport at $1,217, according to Reuters technical analyst WangTao. Hedge funds and money managers cut their net short positionsin Comex gold by 10,473 contracts to 26,899 contracts in theweek to Oct. 23, the smallest net short position since mid-July,data showed. Among other precious metals, palladium was down 0.3percent at $1,101.0 an ounce.
Silver was up 0.1 percent at $14.62 per ounce, whileplatinum gained 0.1 percent at $832.0 an ounce.
(Reporting by Vijaykumar Vedala in Bengaluru; Editing by JosephRadford, Subhranshu Sahu and Rashmi Aich)
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