* Spot gold could hit $1,278/oz -technicals
* Gold, silver hit 3-1/2 month highs in previous session
(Adds comment, updates prices)
By Sethuraman N R
Feb 28 Gold prices held steady on Tuesday after
falling from a 3-1/2 month high in the previous session, with
investors looking towards a speech later in the day by U.S.
President Donald Trump for more clarity on his economic policy.
Spot gold was up 0.1 percent at $1,253.93 per ounce
at 0734 GMT. The metal hit its highest since Nov. 11 at
$1,263.80 on Monday.
U.S. gold futures fell 0.3 percent to $1,254.50.
Investors are shifting their attention to 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
"While it is expected (Trump) will announce pro-growth
policies there is still large underlying support for the metal
and will continue to be until these announcements turn into
action," said MKS PAMP Group trader Sam Laughlin.
"The key for a leg higher is a sustained move through the
200-day moving average, currently sitting at $1,261.20."
President Donald Trump on Monday said he would propose a
budget that would ramp up spending on defence, but seek savings
elsewhere to pay for it.
"A possible setback could set in (gold) over the next 24
hours, but we still could end the week on a firmer note,
especially if Janet Yellen’s testimony on Friday lays open the
possibility that the Fed will likely pass on a rate move in
March," said INTL FCStone analyst Edward Meir.
A delay in an interest rate hike by the U.S. Federal Reserve
would be positive for non-interest bearing bullion while also
keeping the dollar weaker, making the dollar-denominated metal
more appealing to buyers paying in other currencies.
However, there are still some Fed officials pushing for a
rate increases as soon as next month.
"Persistent speculation about Greek fiscal policy and
looming elections in the Netherlands and France are contributing
to the geopolitical uncertainty on the part of the European
continent," Heraeus Metal Management said in a note.
"We continue to see gold well supported – overcoming
resistance at $1,249 (per ounce) may suggest higher prices. We
see the next resistance level at $1,278 and also the $1,300 mark
is moving into the sight of investors."
Spot gold is still targeting $1,278 per ounce, following its
break above resistance at $1,249, Reuters Technical analyst Wang
Spot silver rose 0.3 percent to $18.33 an ounce. The
metal hit a 3-1/2-week high at $18.48 in the previous session.
Platinum was firm at $1,028 per ounce, after touching
a five-month high at $1,044.10 in the prior session.
Palladium was also firm at $781 per ounce.
(Reporting by Nallur Sethuraman in Bengaluru; Editing by
Christian Schmollinger and Joseph Radford)