After gaining more than 8 percent in 2016, gold extended its strong run into the New Year, pushed higher in 2017's first day of trading on Tuesday by technical buying, despite pressure from a strong dollar. At 0344 GMT, spot gold was up 0.4 percent at $1,156.75 per ounce, while U.S. gold futures rose 0.5 percent to $1,157.20. "A technical rebound is just under way," said Jiang Shu, chief analyst at Shandong Gold Group, after gold slipped in December when solid U.S. economic data gave the Federal Reserve confidence to raise rates for the first time in a year. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced. "The market is waiting for (U.S.) non-farm payrolls data due this Friday. If we have lower-than-expected data, it is a good chance for gold to have a strong rebound," Shu said. But looking further ahead, Shu expects U.S. interest rate hikes this year to pressure gold. "Any rise in the first quarter will be a medium-term technical rebound and not a fundamentally driven long trend rally," Shu said. The most active COMEX gold futures contract finished 2016 up 7.1 percent as compared to the end of 2015. The dollar index – which measures the greenback against six major rivals – climbed over half a percent. On Tuesday, the U.S. dollar held on to broad gains, resuming its ascent after last week's brief wobble as the prospect of rising U.S. interest rates this year kept sentiment bullish. Asian stocks began 2017 on a flat note on Tuesday, uninspired by a surge in European markets to their highest in more than a year, while the dollar resumed its climb after last week's stumble. Hedge funds and money managers slashed their net long positions in COMEX gold to a near 11-month low and trimmed bullish bets in silver contracts in the week to Dec. 27. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.14 percent to 822.17 tonnes on Friday from Thursday. In other precious metals news, spot silver rose 0.7 percent to $16.04 per ounce. Platinum was up over 1 percent to $911.40, while palladium rose 0.7 percent to $683.10. Source: Reuters
