* Spot gold may test $1,218 an ounce -technicals
* Bullion on track for second week of gains
* Platinum off over 4-month highs hit on Thursday
(Adds comment, updates prices)
By Sethuraman N R
Feb 10 Gold fell on Friday on a firmer dollar
after U.S. President Donald Trump promised a major tax
announcement and as economic data boosted expectations of a U.S.
Spot gold was down 0.5 percent at $1,223.93 per ounce
by 0711 GMT. On Wednesday, it touched its highest since Nov. 11
U.S. gold futures dropped as much as over 1 percent
to $1,223.30 an ounce.
"The reversal (in prices) was almost entirely due to the
surge in the dollar that took place after President Trump
revealed he had a 'phenomenal' tax plan ready for unveiling in a
few weeks' time," said INTL FCStone analyst Edward Meir.
Trump plans to announce the most ambitious tax reform plan
since the Reagan era in the next few weeks, the White House said
on Thursday, sending stock prices and the dollar higher on hopes
for a cut in corporate tax rates.
"Thursday's trading showed us that (investors) were
enamoured more by Trump's general announcement and have not yet
bothered to focus on the fine print," Meir said, adding the
selloff in gold could be somewhat premature and could reverse
U.S. economic data also underpinned the dollar. Initial
jobless claims unexpectedly dropped last week to a nearly
43-year low, while inventories at wholesalers surged in December
for a second straight month.
The dollar index was firm at 100.600. The dollar
extended its overnight rally and edged up to a nine-day high of
Chicago Federal Reserve President Charles Evans, a voter on
policy this year, told reporters it is reasonable to expect the
Fed to raise rates three times this year.
However, St. Louis Fed President James Bullard said interest
rates could likely remain low through at least 2017, with no
clear sense yet of whether the Trump administration's policies
will spark higher inflation or growth.
"We continue to expect gold to remain supported in the first
half of 2017, on the back of risk aversion and global
uncertainties," said OCBC analyst Barnabas Gan.
"We continue to place Trump-centric concerns as one of the
top concerns on our radar, given the uncertainty surrounding his
Spot gold may test support at $1,218 per ounce, a break
below which could open the way towards the next support at
$1,182, according to Reuters technical analyst Wang Tao.
"$1,200 is a very good support and it is not going to be
very easy to bring it down," said Ronald Leung, chief dealer at
Lee Cheong Gold Dealers in Hong Kong.
Spot silver fell 0.4 percent to $17.56 an ounce.
Platinum dropped 1.5 percent to $996.50, after
hitting its highest since Oct. 3 at $1,028.50 in the prior
Palladium declined 1 percent to $762.30.
(Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph
Radford and Amrutha Gayathri)