Home / Market / Stock-market-news /  Global gold prices inch up as dollar slips on tax bill worries

Gold prices edged higher in Asian trade on Friday, heading for their first weekly gain in four, as the dollar sagged on concerns about the progress of US tax reform.

Spot gold was up nearly 0.2% at $1,254.74 an ounce as of 9.19am, and has gained 0.5% so far this week. US gold futures were unchanged at $1,257 an ounce. The dollar was down 0.1% at 112.26 yen.

“The US dollar is weakening a little and that’s benefiting gold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

President Donald Trump’s efforts to win passage of a sweeping tax bill in the US Congress hit potential obstacles on Thursday when two more Republican senators insisted on changes.

“After the Fed announcement it seems like short-covering pushed up gold to $1,260. Between the now and towards the end of the year, I think markets will be a bit quiet. The downside will be between $1,240-$1,245 and upside $1,260- $1,265," Leung said.

The US central bank on Wednesday raised interest rates for the third time this year as expected, but kept its outlook of three rate rises in the next year unchanged.

“It (gold) could merely be positioning after FOMC, and short-covering after gold’s fall just before the meeting," said OCBC analyst Barnabas Gan.

“Given the uncertainty over the tax reform, we would wait for more concrete news over how it may pan out before formulating a view," said Gan, adding that a sustained global growth backdrop and higher rates should promote yield-chasing behaviour, and drag gold prices lower into 2018.

Higher US interest rates tend to boost the dollar and push bond yields up, weighing on greenback denominated, non-interest bearing gold.

Meanwhile, Asian stocks edged higher on Friday, and the euro sagged after the European Central Bank signalled it would maintain stimulus for as long as needed.

Spot gold is expected to test a resistance at $1,262 per ounce, a break above which could lead to a gain to the next resistance at $1,276, said Reuters technicals analyst Wang Tao.

In other precious metals, silver and platinum were both 0.2% higher, at $15.90 an ounce and $880.50 an ounce, respectively. Palladium was down 0.3% at $1,030.15. Reuters

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Recommended For You
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout