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Gold slips as markets await US healthcare vote

Friday, March 24, 2017 - 15:24

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Gold prices edged lower on Friday against a backdrop of a rising US dollar as markets waited to see whether US President Donald Trump succeeds in pushing through healthcare reforms, viewed as a potential bellwether for his ability to impose his economic and political agenda.

[BENGALURU] Gold prices edged lower on Friday against a backdrop of a rising US dollar as markets waited to see whether US President Donald Trump succeeds in pushing through healthcare reforms, viewed as a potential bellwether for his ability to impose his economic and political agenda.

A rough ride for the healthcare plan could affect Trump's efforts to cut taxes and boost infrastructure, with the potential to drive more investors to gold as a safe haven if stock markets fall, analysts and traders said Spot gold was down 0.2 per cent at US$1,242.31 per ounce by 0651 GMT. On Thursday, it touched its strongest since Feb 28 at US$1,253.12. The yellow metal was on track for its second straight week of gains.

US gold futures were down 0.4 per cent at US$1,242.20.

"If the (healthcare) vote is to pass the reforms, gold could face pressure. But, if it encounters problems, we might chase a previous high at around US$1,260," a precious metals trader said.

sentifi.com

Market voices on:

The US dollar recouped a little lost ground on Friday amid signs the delayed healthcare vote would go ahead later in the day - though it remained unclear whether it would pass.

The US dollar index , which measures the greenback against a basket of currencies, rose 0.2 per cent to 99.956. It hit a seven-week low of 99.547 on Wednesday.

"The yellow metal continues to see solid interest underneath US$1,245, however should prices fail again at US$1,250 we may see this support level broken to test US$1,230 - US$1,235," MKS PAMP Group trader Sam Laughlin said.

Spot gold is still targeting US$1,237 per ounce, as it faces a strong resistance zone of US$1,247-US$1,254, Reuters technical analyst Wang Tao said.

"We suspect that short-term long positioning has become extended and may be vulnerable to a correction," said Jeffrey Halley, senior market analyst at OANDA.

"A break of US$1,242.50 should see some stop-loss sell action appear as traders reduce longs, after which gold will most likely move to the nuances of Washington DC headlines." Spot silver fell 0.2 per cent to US$17.51 an ounce, after hitting over two-week high of US$17.69 in the prior session.

Platinum dropped 0.7 per cent to US$951.50.

Palladium rose 0.4 per cent to US$801. It climbed to a peak of US$808.70 in the prior session, its highest since March 2015.

REUTERS

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