* Investors eye Trump speech to Congress on Tuesday
* Spot gold seen rising to $1,278 an ounce -technicals
* Speculators raise gold longs to highest in nearly 3 months
By Sethuraman N R
Feb 27 Gold prices held firm on Monday near
3-1/2 month highs hit in the previous session, with investors
waiting for greater clarity on President Donald Trump's economic
Spot gold was little changed at $1,256.93 per ounce
at 0701 GMT. The metal hit its highest since Nov. 11 at
$1,260.10 in the previous session.
U.S. gold futures were also steady at $1,258.
"The biggest driver of gold has been the relatively weak
U.S. dollar. People think that ... Trump doesn't want a strong
dollar and the market thinks that perhaps there would not be a
rate hike in the first half of the year," said Jiang Shu, chief
analyst at Shandong Gold Group.
Investors are looking towards Trump's policy speech to a
joint session of Congress on Tuesday night where he is expected
to provide clues on his plans to cut taxes.
"The momentum has its own driving force," said Shu.
"Since the beginning of the year, the gold price has always
been on the rise. This will draw more and more momentum traders
into the market."
Hedge funds and money managers raised their net long
position in COMEX gold to the highest in nearly three months
during the week to Feb. 21. Speculators raised their net long
position in bullion by 14,482 to 82,464 lots.
"It also means that market sentiment is generally on the
bullish side," Shu added.
Holdings of the largest gold-backed exchange-traded fund,
New York's SPDR Gold Trust , have risen more than
5 percent this month.
Spot gold is expected to rise to $1,278 per ounce, as it has
more or less broken above resistance at $1,249, according to
Reuters technical analyst Wang Tao.
"We have a plethora of Federal governors speaking this week,
including Janet Yellen, which should give the Street a lot more
visibility into whether March’s FOMC is live," said Jeffrey
Halley, senior market analyst at OANDA.
"This is potentially significant because the market is
pricing in virtually no chance of the Federal Reserve moving in
March. Thus this represents a substantial event risk that could
also take the wind out of gold's sails."
Gold has resistance at $1,362, the 200-day moving average,
with crucial long term resistance in the $1,300 area, with
support at $1245, Halley added.
Spot silver climbed 0.1 percent to $18.36 an ounce,
after hitting its highest in 3-1/2 months at $18.41 earlier in
Platinum rose 0.1 percent to $1,022.70, having marked
its strongest in nearly 5 months at $1,030.20 earlier in the
Palladium rose 0.2 percent to $770.25.
(Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph
Radford and Amrutha Gayathri)