Bengaluru: Gold prices edged lower on Friday against a backdrop of a rising dollar as markets waited to see whether US President Donald Trump succeeds in pushing through health care reforms, viewed as a potential bellwether for his ability to impose his economic and political agenda.
A rough ride for the healthcare plan could affect Trump’s efforts to cut taxes and boost infrastructure, with the potential to drive more investors to gold as a safe haven if stock markets fall, analysts and traders said. Spot gold was down 0.2% at $1,242.31 per ounce by 12.21pm.
On Thursday, it touched its strongest since 28 February at $1,253.12. The yellow metal was on track for its second straight week of gains. US gold futures were down 0.4% at $1,242.20.
“If the (healthcare) vote is to pass the reforms, gold could face pressure. But, if it encounters problems, we might chase a previous high at around $1,260,” a precious metals trader said.
The dollar recouped a little lost ground on Friday amid signs the delayed healthcare vote would go ahead later in the day - though it remained unclear whether it would pass.
The dollar index , which measures the greenback against a basket of currencies, rose 0.2% to 99.956. It hit a seven-week low of 99.547 on Wednesday.
“The yellow metal continues to see solid interest underneath $1,245, however should prices fail again at $1,250 we may see this support level broken to test $1,230 - $1,235,” MKS PAMP Group trader Sam Laughlin said.
Spot gold is still targeting $1,237 per ounce, as it faces a strong resistance zone of $1,247-$1,254, Reuters technical analyst Wang Tao said.
“We suspect that short-term long positioning has become extended and may be vulnerable to a correction,” said Jeffrey Halley, senior market analyst at OANDA. “A break of $1,242.50 should see some stop-loss sell action appear as traders reduce longs, after which gold will most likely move to the nuances of Washington D.C. headlines.”
Spot silver fell 0.2% to $17.51 an ounce, after hitting over two-week high of $17.69 in the prior session. Platinum dropped 0.7% to $951.50.
Palladium rose 0.4% to $801. It climbed to a peak of $808.70 in the prior session, its highest since March 2015. Reuters
