Gold price inches higher as dollar hits two-week low

New York (Feb 15)  Gold was on track for its fourth straight session of gains on Thursday as the dollar skidded to its lowest in two weeks on concerns about the impact of hlevels of U.S debt and tax cuts.

Spot gold was up 0.2 percent at $1,353.73 an ounce by 1106 GMT after earlier hitting its highest since Jan. 25 at $1,357.08. It had risen 1.6 percent on Wednesday, its highest one-day gain since May 2017. U.S. gold futures were down 0.1 percent at $1,356.8
per ounce.

"We are back to what was driving gold prior to that little spike in volatility last week which is the direction of the dollar and the longer term direction of U.S debt and how it’s going to be serviced,"  CBC Standard Bank analyst Tom Kendall said.

The dollar index against a basket of currencies was down 0.5 percent at 88.686, after earlier hitting a near two-week low of 88.585.
    A recovery in broader risk sentiment was also seen weighing
on the dollar, which had gained during the market turmoil
earlier this month.      
    The U.S. currency has been hit by a variety of setbacks this
year, including from prospects Washington might pursue a weak
dollar strategy to the perceived erosion of its yield advantage
as other countries part with easier monetary policy. Concerns
about the growing U.S. fiscal deficit have also weighed on the
currency.   
    Inflation fears boost gold, which is seen as a safe haven
against rising prices. But expectations that the Fed will raise
interest rates to fight inflation make gold less attractive
since it is not interest-yielding.
    BMI Research was neutral on gold prices because of mixed
signals from wider financial markets, it said in its gold
outlook.
    "Key resistance for prices comes in around the 2016 high of
$1,375 per ounce and we would have to see this level decisively
broken before calling for significant near-term gains," the
research group said in a note.
    Among other precious metals, silver was up 0.3
percent at $16.92 an ounce after earlier hitting a more than
one-week high of $16.98.
    Palladium was 1.9 percent higher at $1,092.47, after
earlier hitting a one-week top of $1,020.90.
    Platinum was up 0.7 percent at $1,003.90, after
earlier hitting $1,007.10, its highest in two weeks.

Reuters