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PRECIOUS-Gold rises for 2nd week as dollar hampered by healthcare vote
March 24, 2017 / 6:26 PM / 5 months ago

PRECIOUS-Gold rises for 2nd week as dollar hampered by healthcare vote

    * Gold up 1.6 percent this week
    * Healthcare vote likely later Friday afternoon
    * Palladium rises to 2-year highs

 (Adds comments, updates prices, Fed news, adds NEW YORK
dateline)
    By Devika  Krishna Kumar and Peter Hobson
    NEW YORK/LONDON, March 24 (Reuters) - Gold rose on Friday,
notching its second straight week of gains as concern about the
ability of U.S. President Donald Trump to push legislation
through Congress pressured the dollar, making bullion cheaper
for holders of other currencies.
    The dollar remained near seven-week lows against a basket of
currencies        ahead of a vote on a healthcare bill, formally
called the American Health Care Act.       
    Gold, seen as a safe haven asset, has benefited from falls
in the dollar, U.S. bond yields and stocks this week as Trump's
difficulty in passing healthcare reform has undermined faith
that he can deliver on promises of tax cuts and investment.
                         
    Spot gold        was up 0.2 at $1,247.66 an ounce by 2:10
p.m. EDT (1810 GMT). The metal has risen 1.6 percent this week
and on Thursday touched $1,253.12, its highest since Feb. 28. It
rose nearly 2 percent a week earlier.
    U.S. gold futures         settled at $1,248.50 an ounce. 
    Trump has set up a showdown with lawmakers by demanding
support for the healthcare bill in a vote on Friday
afternoon.            
    "Gold seems to have done a little bit better as the day wore
on as it's becoming pretty sure that this bill is not gonna pass
... That's a driving force all the way across," said Bill
O'Neill, co-founder of LOGIC Advisors
    "The way we're looking at gold is - day to day a lot can
happen that causes emotional movement in the market but looking
forward, we're bullish and I'm looking for $1300 and I think you
have to look at the fact that a lot of things can happen that
ultimately will prove supportive for gold."
    Failure to pass the bill could push gold through technical
resistance at around $1,250, analysts said. 
    "If the market can consolidate above $1,250 in the coming
days we could see an attempt at the 200-day moving average of
$1,259.50," Tim Brown at MKS PAMP wrote in a note. 
    Away from Congress, focus was also on the U.S. Federal
Reserve. Three Fed officials, Charles Evans, James Bullard and
William Dudley, spoke on Friday.             
    The Federal Reserve's delicate interest-rate hikes are
necessary given the economy is stable and any further fall in
unemployment could lead to an inflation run-up, one of the most
influential U.S. central bankers, Dudley, said.              
    Gold prices have been supported by expectations that the Fed
will raise interest rates more slowly than some had feared.
Higher rates tend to pressure gold by lifting the opportunity
cost of holding non-yielding bullion and boosting the dollar, in
which gold is priced. 
    Bullard said on Friday that just one more rate hike this
year would be appropriate following a rise earlier this month,
but that he would not fight a second one. Dudley said that
"delicate" policy changes were necessary.             
                         
    Evans did not address monetary policy or the economic
outlook in Washington.            
    Silver        was up 1 percent at $17.91 an ounce. Platinum
       was 0.6 percent higher at $964.50 an ounce. 
    Palladium        was up 1.4 percent at $810 an ounce, having
hit a two-year high of $815.40 earlier in the session. 
    The metal used in catalytic converters that curb pollution
from vehicle exhausts has risen about 5 percent this week thanks
to strong economic data and demand from the automobile sector.

 (Additional reporting by Nallur Sethuraman; Editing by Elaine
Hardcastle and Tom Brown)
  

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