You are here

Gold dips on firmer US dollar but stays close to 1-month peak

[BENGALURU] Gold eased on Monday due to a stronger US dollar, but remained near a one-month high hit in the previous session on uncertainty over progress on a potential overhaul of the US tax code.

Spot gold was down 0.2 per cent at US$1,291.44 per ounce by 0757 GMT, but not far off Friday's peak of US$1,297, its strongest level since Oct 16.

US gold futures for December delivery dropped 0.4 per cent to US$1,291.20.

"Friday's move higher has definitely improved gold's chart patterns, but it remains to be seen if this will be enough to attract fresh fund buying," INTL FCStone analyst Edward Meir said in a note.

sentifi.com

Market voices on:

"Much of this will depend on the progress (or lack thereof) that the US tax bill makes in the Senate. If efforts to pass it flounder, we could see a much sharper correction set in over US equities, prompting another leg higher in gold."

US President Donald Trump would not insist on including repeal of an Obama-era health insurance mandate in a bill intended to enact the biggest overhaul of the tax code since the 1980s, a senior White House aide said on Sunday.

"The apparent difficulty in getting tax cuts approved in the US Senate has seen investors return to safe-haven assets," ANZ analysts said in a note.

Spot gold may retest a resistance level of US$1,298, a break above which could lead toward the next resistance level at US$1,309, according to Reuters technical analyst Wang Tao.

Gold could easily push higher and potentially above US$1,300, said Jordan Eliseo, chief economist at gold trader ABC Bullion.

"A little bit of momentum is creeping in this market, so that shouldn't be a surprise. Meanwhile, a little bit of volatility is creeping up in other financial markets," he said.

The US dollar index, which tracks the greenback against a basket of six rival currencies, gained 0.2 per cent as the euro faltered after German Chancellor Angela Merkel's efforts to form a three-way coalition government failed, raising concerns over political uncertainty in the euro zone's largest economy.

Hedge funds and money managers raised their net long positions in Comex gold and silver contracts in the week to Nov 14, data showed on Friday.

Silver fell 0.8 per cent to US$17.16 an ounce after hitting a one-month high in the previous session, while platinum retreated from Friday's near two-month peak of US$954.30 and was down 0.8 per cent at US$943.40.

Palladium rose 0.3 per cent to US$996 an ounce.

REUTERS

grab

Receive $80 Grab vouchers valid for use on all Grab services except GrabHitch and GrabShuttle when you subscribe to BT All-Digital at only $0.99*/month.

Find out more at btsub.sg/promo

Powered by GET.comGetCom