Gold holds steady, investors focus on Trump’s agenda
Gold prices held steady on Tuesday as investors looked to see if Trump would be able to enact promised tax cuts and infrastructure spending, with the dollar drifting from multi-month lows in the previous session.
Spot gold was mostly unchanged at $1,253.66 per ounce at 0238 GMT, after touching its highest in a month at $1,261.03 the day before.
U.S. gold futures inched down 0.2 percent to $1,253.7.
“The markets are now starting to settle down as concerns around the implications of the failed (U.S.) healthcare bill seem to have somewhat abated,” said ANZ analyst Daniel Hynes.
“We’re likely to see gold prices relatively steady for now until there is a little bit more clarity on Trump’s other policies, particularly over the tax bill.”
The dollar index was up 0.1 percent at 99.215. Asian stocks pulled ahead on Tuesday after Wall Street steadied and the dollar bounced from a four-month-low.
Trump suffered a major reversal when Republican leaders pulled legislation to overhaul the U.S. healthcare system.
The blow unnerved financial markets, heightening worries about the chances of enacting tax reforms and big spending packages.
The likely upper limit for gold prices would be at the $1,260 level over the next couple of weeks, Hynes said.
Hynes further added that the precious metal would struggle to break through its 200-day average, now at $1,259.12 an ounce.
Gold has already rallied sharply from its March 15 low following a less hawkish policy statement than expected from them U.S. Federal Reserve, which dampened expectations for near-term increases in U.S. interest rates.
Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar in which it is priced.
Meanwhile, the world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, reported an inflow of 2.7 tonnes on Monday.
Meanwhile, spot silver fell 0.4 percent to $17.99 per ounce. In the previous session, the metal touched its highest since March 2 at $18.12.
Spot silver may break resistance at $18.46 per ounce and rise towards the next level of resistance at $19.34 over the next three months, according to Reuters technical analyst Wang Tao.
Platinum climbed 0.3 percent to $965.90 per ounce.
On Monday, it marked its highest since March 6 at $982.60.
Palladium slipped 0.7 percent to $787.55 per ounce.
Source: Reuters
