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PRECIOUS-Gold hits 1-mth top after Trump doubts knock dollar and shares
March 27, 2017 / 2:15 PM / 8 months ago

PRECIOUS-Gold hits 1-mth top after Trump doubts knock dollar and shares

    * Trump healthcare defeat raises reflation doubts
    * Dollar index slides to four-month low, equities fall
    * GRAPHIC-Gold hits 200-day moving average reut.rs/2nmwp50
    * GRAPHIC-2017 asset returns  tmsnrt.rs/2jvdmXl

 (Updates prices; adds comment, second byline, NEW YORK
dateline)
    By Marcy Nicholson and Jan Harvey
    NEW YORK/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
basket of currencies. Stocks and U.S. long-dated Treasury yields
slipped but recovered lost ground as investors hoped Trump will
still be able to bolster the economy.            
    Spot gold        was up 1 percent at $1,256.02 an ounce by
2:28 p.m. EDT (1828 GMT), having touched a one-month high of
$1,261.03 and failing to hold above the 200-day moving average
for the second time in a month.
    U.S. gold futures        for April delivery settled up 0.6
percent at $1,255.70. 
    "This is entirely driven by the weaker U.S. dollar,"
Commerzbank analyst Carsten Fritsch said. "The Trumpflation
trade is being priced out after the failure to repeal
Obamacare."    
    Gold had already rallied sharply from its March 15 low after
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. rates, which
increase the opportunity cost of holding non-yielding bullion
while boosting the dollar, in which it is priced.
    A close above the 200-day average, now at $1,259 an ounce,
could trigger follow-through buying, analysts said.
    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.             
    "Tactical investors increased their exposure to gold after
the FOMC meeting, primarily by establishing fresh long positions
as well as further short-covering activity," said Standard
Chartered in a note.
    "However, positioning is still relatively light, suggesting
room for additional exposure to gold."
    China's net gold imports via main conduit Hong Kong rose
50.8 percent month on month in February to 47.931 tonnes, data
showed.             
    Silver        was up 1.8 percent at $18.06 an ounce, off an
earlier three-week high of $18.12.
    Spot platinum        gained 0.5 percent to $965.50, after
rising to $982.60, a three-week high and around the level where
the 50-day and 200-day moving averages nearly converge.
    Palladium was down 1.7 percent at $795.10 after hitting a
two-year peak of $815.40 on Friday.

    
 (Additional reporting by Nallur Sethuraman in Bengaluru;
Editing by David Goodman and Lisa Shumaker)
  

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