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PRECIOUS-Gold hits 1-month high after Trump doubts knock dollar, stocks
March 27, 2017 / 10:09 AM / 10 months ago

PRECIOUS-Gold hits 1-month high after Trump doubts knock dollar, stocks

    * Trump healthcare defeat raises reflation doubts
    * Dollar index slides to 4-month low, equities fall
    * GRAPHIC-Gold hits 200-day moving
    * GRAPHIC-2017 asset returns:

 (Updates prices)
    By Jan Harvey
    LONDON, March 27 (Reuters) - Gold rallied more than 1
percent on Monday after U.S. President Donald Trump's failure to
push through a healthcare reform package on Friday raised
questions over his ability to deliver promised tax cuts and
spending plans.
    That knocked the dollar to a four-month low versus a
currency basket and drove a drop in stock markets, with European
indices sliding nearly 1 percent in early trade and U.S. stock
index futures hitting six-week lows.            
    Spot gold        was up 1.1 percent at $1,257.72 an ounce at
1135 GMT, having touched a one-month high of $1,259.14 earlier
in the session. U.S. gold futures        for April delivery were
up $9.30 an ounce at $1,257.80.
    "Trump's spectacular failure to get his health bill through
Congress raises concerns about his ability to achieve his goals
on other policies," Saxo Bank's head of commodity research Ole
Hansen said.
    "With stocks, the dollar and bond yields lower and
geo-political risks on the rise, gold may stand out as the
commodity of choice at such time."
    Gold had already rallied sharply from its March 15 low
following a less hawkish policy statement than expected from the
Federal Reserve, which dampened expectations for near-term
increases in U.S. interest rates.
    Gold is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding non-yielding
bullion, while boosting the dollar, in which it is priced.
    The metal ran into resistance in earlier trade at its
200-day moving average, currently at $1,259 an ounce, a level
that also halted last month's sharp price rally.
    "If it were to rise lastingly above this threshold, we could
see technical follow-up buying," Commerzbank said in a note.
"That said, an attempt to exceed the 200-day moving average
proved abortive at the end of February, causing the gold price
to shed almost $70 in the subsequent days."
    The world's largest gold-backed exchange-traded fund, New
York-listed SPDR Gold Shares      , reported an outflow of 1.8
tonnes on Friday.          
    U.S. Commodity Futures Trading Commission data showed on
Friday however that hedge funds and money managers boosted their
net long positions in COMEX gold in the week to March 21, after
two weeks of cuts.             
    China's net gold imports via main conduit Hong Kong rose
50.8 percent month-on-month in February to 47.931 tonnes, data
    Silver        was up 1.1 percent at $17.91 an ounce, off an
earlier three-week high of $17.959, while platinum        was
1.7 percent higher at $976.95. Palladium was down 0.2 percent at
$807.70, after hitting a two-year peak of $815.40 on Friday.

 (Additional reporting By Nallur Sethuraman in Bengaluru;
Editing by Ruth Pitchford and Susan Thomas)

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