March 28, 2017 / 3:56 AM / 4 months ago

PRECIOUS-Gold steady, investors focus on Trump agenda

4 Min Read

    * Spot silver may break resistance at $18.46/oz -technicals
    * Holdings of SPDR Gold Trust rise on Monday
    * GRAPHIC-2017 asset returns  tmsnrt.rs/2jvdmXl

 (Updates prices, adds comment)
    By Arpan Varghese
    March 28 (Reuters) - Gold prices held steady on Tuesday as
investors looked to see if U.S. President Donald Trump would be
able to enact promised tax cuts and infrastructure spending,
with the dollar drifting slightly higher off of multi-month
lows.
    Spot gold        was mostly unchanged at $1,253.83 per ounce
at 0557 GMT, after touching its highest in a month at $1,261.03
the day before.
    U.S. gold futures         inched down 0.2 percent to
$1,253.60.
    "The markets are now starting to settle down as concerns
around the implications of the failed (U.S.) healthcare bill
seem to have somewhat abated," said ANZ analyst Daniel Hynes.
    "We're likely to see gold prices relatively steady for now
until there is a little bit more clarity on Trump's other
policies, particularly over the tax bill."
    Trump suffered a major reversal when Republican leaders
pulled legislation to overhaul the U.S. healthcare system. The
blow unnerved financial markets, heightening worries about the
chances of enacting tax reforms and big spending packages.
            
    The likely upper limit for gold would be at the $1,260 per
ounce level over the next couple of weeks, Hynes said, adding
that the precious metal would struggle to break through its
200-day average, now at $1,259.12.  
    Gold has already rallied sharply from its March 15 low
following a less-hawkish-than-expected policy statement from the
U.S. Federal Reserve, which dampened expectations for near-term
increases in U.S. interest rates.
    Gold is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding non-yielding
bullion, while boosting the dollar in which it is priced.
    The markets also took stock of separate statements from Fed
officials on Monday, with Chicago Federal Reserve Bank President
Charles Evans saying the case for four rate hikes this year is
not yet solid and would require a stronger lift in inflation.
                         
    "We remain constructive about gold in the short term," INTL
FCStone analyst Edward Meir said, adding that further weakness
in the dollar could push gold higher.
    The dollar limped off multi-month lows against major peers
on Tuesday.       
    Meanwhile, the world's largest gold-backed exchange-traded
fund, New York-listed SPDR Gold Shares      , reported an inflow
of 2.7 tonnes on Monday.             
    In other metals, spot silver        fell 0.2 percent to
$18.03 per ounce. In the previous session, the metal touched its
highest since March 2 at $18.12.
     Spot silver may break resistance at $18.46 per ounce and
rise towards the next level of resistance at $19.34 over the
next three months, according to Reuters technical analyst Wang
Tao.             
     Platinum        climbed 0.5 percent, to $967.90 per ounce.
On Monday, it marked its highest since March 6 at $982.60.
    Palladium        slipped 0.3 percent to $790.50 an ounce.

    
 (Reporting by Arpan Varghese in Bengaluru; Editing by Joseph
Radford and Christian Schmollinger)
  

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