Gold price retreats as Trump tax pledge lifts dollar

New York (Feb 10)  Gold fell on Friday, retreating further from this week's three-month high, as U.S. President Donald Trump's promise of a major tax announcement boosted the dollar and upbeat data fuelled talk of a near-term rise in U.S.
interest rates.

Disappointment among some buyers at gold's failure to break above the $1,245 an ounce level it tested twice this week has also fed into the pull-back, analysts said.

Spot gold was down 0.5 percent at $1,225.01 an ounce at 1028 GMT, while U.S. gold futures for April delivery
dropped $10.30 to $1,226.50. On Wednesday spot gold reached its highest since mid-November at $1,244.67.
    The dollar reached a 10-day high against a basket of
currencies on Friday and was on course for its best week since
mid-December as Trump's pledge to announce a major tax plan
within weeks cooled some market nerves, reinvigorating dollar
bulls.      
    "Obviously the dollar has recovered a bit of strength in the
past day or so, which has weighed on precious metals,"
Mitsubishi analyst Jonathan Butler said.
    "The move above $1,220 was pretty convincing, but we didn't
get to the next level at $1,249-$1,250, which would have been
confirmation of that bullish trend going back to the start of
the year. What we've seen is possibly some disappointed
investors turning tail and booking some profit."
    U.S. economic data also stoked talk that the Federal Reserve
would press ahead with U.S. interest rate hikes sooner rather
than later. Initial jobless claims dropped unexpectedly last
week to the lowest in nearly 43 years.            
    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.
    Major physical markets in Asia were mixed this week as
Indian jewellers stocked up for wedding season while rising
prices sidelined buyers elsewhere.         
    Premiums over the spot price in India rose to $3 an ounce
this week from about $2 the previous week, indicating upbeat
demand. In Hong Kong and Singapore they edged down to between 80
cents and $1.20 from about $1-$1.40 last week.
    Silver        was down 0.3 percent at $17.59 an ounce, while
palladium        gained 0.5 percent to $775.90.
    Platinum        lost 0.8 percent to $1,004.10, having
touched its highest since Oct. 3 on Thursday at $1,028.50.
    A Commerzbank note on technicals said that the bank was
alert to profit-taking after platinum's retest of its $1,025
November high.
    "A close above $1,025.51 would target $1,070, the Sept. 22
high, and the 61.8 percent retracement at $1,080," it said.

Source: Reuters