Last Modified: Mon, Feb 27 2017. 11 05 AM IST Global gold prices...

Last Modified: Mon, Feb 27 2017. 11 05 AM IST

Global gold prices near three-month high, Trump economic policy in focus
Spot gold prices were little changed at $1,256 per ounce at 9.10am. The metal hit its highest since 11 November at $1,260.10 in the previous session
Sethuraman N R

Spot gold prices are expected to rise to $1,278 per ounce, as it has more or less broken above resistance at $1,249, according to Reuters technical analyst Wang Tao. Photo: AP
Bengaluru: Gold prices held firm on Monday near three-and-half-month high hit in the previous session, with investors waiting for greater clarity on US President Donald Trump’s economic policy.

Spot gold was little changed at $1,256 per ounce at 9.10am. The metal hit its highest since 11 November at $1,260.10 in the previous session.

US gold futures were also steady at $1,257.30.

“The biggest driver of gold has been the relatively weak US dollar. People think that ... Trump doesn’t want a strong dollar and the market thinks that perhaps there would not be a rate hike in the first half of the year,” said Jiang Shu, chief analyst at Shandong Gold Group.

Investors are looking towards 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 taxes.

“The momentum has its own driving force,” said Shu.

“Since the beginning of the year, the gold price has always been on the rise. This will draw more and more momentum traders into the market.”

Hedge funds and money managers raised their net long position in COMEX gold to the highest in nearly three months during the week to 21 February. Speculators raised their net long position in bullion by 14,482 to 82,464 lots.

“It also means that market sentiment is generally on the bullish side,” Shu added.

Holdings of the largest gold-backed exchange-traded fund, New York’s SPDR Gold Trust, have risen more than 5% this month.

Spot gold is expected to rise to $1,278 per ounce, as it has more or less broken above resistance at $1,249, according to Reuterstechnical analyst Wang Tao.

“We have a plethora of Federal governors speaking this week, including Janet Yellen, which should give the Street a lot more visibility into whether March’s FOMC is live,” said Jeffrey Halley, senior market analyst at OANDA.

“This is potentially significant because the market is pricing in virtually no chance of the Federal Reserve moving in March. Thus this represents a substantial event risk that could also take the wind out of Gold’s sails.”

Gold has resistance at $1,362, the 200-day moving average, with crucial long term resistance in the $1,300 area, with support at $1245, Halley added.

Spot silver climbed 0.2% to $18.38 an ounce, after hitting its highest in 3-1/2 months at $18.41 earlier in the session.

Platinum rose 0.3% to $1,026.10, having marked its strongest in nearly five months at $1,030.20 earlier in the session. Palladium rose 0.1% to $769.25. Reuters