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US retail sales fall sharply in May
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Fed rate decision due on Wednesday
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Trump says he wants 'real end' to nuclear problem with
Iran
(Updates U.S. early-session trading)
By Sarah Qureshi
June 17 (Reuters) - Gold prices rose on Tuesday as
geopolitical tensions escalated in the Middle East, with focus
also turning to the U.S. central bank's policy decision on
Wednesday, while silver surged to a 13-year high.
Spot gold was up 0.2% at $3,390.73 an ounce as of
10:00 am EDT (1400 GMT), while U.S. gold futures fell
0.2% to $3,410.40.
"Geopolitical uncertainty, with the Israeli-Iran war that
will probably escalate before it de-escalates, is going to keep
a floor under the market for safe-haven bidding," said Jim
Wycoff, senior analyst at Kitco Metals.
Israel's military said Iran's military leadership is "on the
run" and that it had killed Iran's wartime chief of staff Ali
Shadmani overnight four days into his job, after he replaced
another top commander killed in the strikes.
U.S. President Donald Trump said that he wanted a "real end"
to the nuclear dispute with Iran and indicated he may send
senior American officials to meet with the Islamic Republic as
the Israel-Iran air war raged for a fifth day.
Elsewhere, the Federal Reserve will announce its policy
decision on Wednesday, followed by Chair Jerome Powell's press
conference.
The U.S. central bank is widely anticipated to leave its
benchmark overnight interest rate in the 4.25%-4.50% range,
where it has been since December.
A low interest rate environment and geopolitical uncertainty
tend to boost gold's appeal.
Central banks around the world expect their gold holdings as
a proportion of their reserves to increase over the next five
years, a survey by the World Gold Council showed.
Data showed that U.S. retail sales dropped more than
expected in May, but consumer spending remained supported by
solid wage growth.
Spot silver gained 2.1% to $37.1 per ounce, reaching
its highest level since February 2012.
"The next objective for the silver bulls is $40, and I think
that's achievable in the coming weeks or sooner," Wycoff added.
Platinum added 0.4% to $1,251.81 and palladium
rose 1.7% to $1,047.23.