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PRECIOUS-Gold rises to two-week high amid Trump concerns
May 17, 2017 / 4:37 AM / 3 months ago

PRECIOUS-Gold rises to two-week high amid Trump concerns

    * Dollar index        hits lowest since Nov. 9
    * Gold faces a resistance at $1,245 per ounce - technicals
    * Sliver, Platinum touch over two-week highs

 (Updates prices)
    By Vijaykumar Vedala
    May 17 (Reuters) - Gold hit a two-week high on Wednesday as
Asian stocks slipped and the dollar fell amid political
uncertainty after a source said U.S. President Donald Trump
asked the FBI to end a probe into his former security adviser.
    Spot gold        climbed 0.6 percent to $1,243.31 per ounce
by 0746 GMT, after earlier touching its strongest since May 3 at
$1,244.70. Gold has risen for five days straight.
    U.S. gold futures         were up 0.6 percent at $1,243.50
per ounce.
    Trump asked his now-dismissed Federal Bureau of
Investigation (FBI) Director James Comey to end a probe into
ties between former national security adviser Michael Flynn and
Russia, according to a source who has seen a memo written by
Comey. The memo raises questions about whether Trump tried to
interfere with a federal investigation. The White House denied
the report.             
    "An inherently weaker dollar was seen because of the Trump
rhetoric," said analyst Barnabas Gan at OCBC. "Safe-haven demand
because of Trump and geopolitical tensions, especially arising
out of North Korea's missile test, is lifting gold prices."
    "People could be looking for a short-term support at $1,240
levels," he added. 
    Distractions at the White House lower the chances of the
administration enacting a legislation that is important to
markets, namely tax and regulatory relief as well as
infrastructure spending, said INTL FC Stone analyst Edward Meir.
 
    "A lack of progress on these issues should theoretically
contribute to the Fed holding a more dovish course for longer,
hurting the dollar and possibly equities in the longer term, but
likely proving beneficial for gold," he said.
    The U.S. Federal Reserve is still likely to raise interest
rates next month, with futures traders pricing in a 74 percent
chance of a hike.
    Spot gold faces a resistance at $1,245 per ounce and may
temporarily hover below this level or retrace to a support at
$1,237.26 before retesting this barrier, according to Reuters
technical analyst Wang Tao.             
    The dollar index       , a measure of the greenback against
a basket of six major currencies, touched its lowest since Nov.
9 and last stood at 98.112. 
    The dollar has taken a hit from solid eurozone economic
data, a fall in U.S. yields on heightened turmoil in Washington
and downbeat housing data.                         
    MSCI's broadest index of Asia-Pacific shares outside Japan
                was down 0.5 percent.                 
    Among other precious metals, silver        marked its 
highest since May 2 and was up 0.3 pct at $16.87 per ounce. 
    Platinum        earlier touched its highest since May 1 but
was dipped 0.1 pct at $936.74 per ounce. Palladium       
slipped 0.3 percent to $791.50.

 (Reporting by Vijaykumar Vedala and Swati Verma in Bengaluru;
Editing by Christian Schmollinger and Gopakumar Warrier)
  

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