Gold price holds near 3-1/2 mth high, Trump speech on the radar

London (Feb 27)  Gold held steady near 3-1/2 month highs on Monday as investors waited for U.S. President Donald Trump to outline plans for tax cuts, infrastructure spending, levies on imports and foreign policy.

Spot gold was little changed at $1,256.18 and ounceat 1059 GMT, having touched its highest since Nov. 11 at $1,260.10 in the previous session. U.S. gold futures were down 0.1 percent at $1,257.

Trump is due to address Congress on Tuesday.   "What he reveals might be important for gold. For example, if he announces significant fiscal easing, that would raise
inflation expectations and lead investors into gold," said
Danske Bank analyst Jens Pederson.
    "But the border adjustment tax (import tax) could push the
dollar higher and that could be negative for gold ... The whole
area of foreign policy may mean more political uncertainty and
that's positive for gold."
    Analysts also expect nervousness ahead of elections in the
Netherlands, France and Germany to help to buoy gold prices over
the course of this year but say that U.S. interest rates are
also important.
    Higher U.S. rates could mean a stronger U.S. currency, which
makes dollar-denominated metals more expensive for holders of
other currencies.
    "Most of the market still expects the U.S. Federal Reserve
to pass on raising rates for now. We would agree with this
consensus view," said INTL FCStone analyst Edward Meir.  "This
could offer gold more upside, at least going into March."
    The U.S. central bank meets March 14-15, though rate
increases are largely expected to be postponed until the June
meeting.
    Bets on higher prices can be seen in data from the CFTC,
showing hedge funds and money managers holding larger net long
positions in COMEX gold, reaching the highest in nearly three
months during the week to Feb. 21.            
    Holdings of the largest gold-backed exchange-traded fund,
New York's SPDR Gold Trust                , have also risen more
than 5 percent this month.
    However, attempts to push prices higher have met strong
resistance in recent days at $1,260, near the 200-day moving
average, traders said.
    Spot silver        was flat at $18.35 an ounce.
    Platinum        slipped 0.2 percent to $1,021.50, having
earlier marked its strongest in nearly five months at $1,030.20.
    Palladium        rose 0.4 percent to $771.65.
    Societe Generale sees robust demand for palladium auto
catalysts from Chinese car manufacturers.
    "The average palladium loading on a Chinese gasoline car is
set to grow again next year, as Chinese standards for light duty
gasoline vehicles are implemented nationally starting in January
2017," said Societe Generale analyst Robin Bhar.
    "The demand outlook remains less compelling for platinum due
to its exposure to diesel technology, which remains under
scrutiny from the emissions scandal."

Source: Reuters