Gold price slips as markets await U.S. healthcare vote
London (Mar 24) Gold prices edged lower on Friday against a backdrop of a rising dollar as markets waited to see whether U.S. President Donald Trump succeeds in pushing through healthcare reforms, viewed as a potential bellwether for his ability to impose his economic and political agenda.
A rough ride for the healthcare plan could affect Trump's efforts to cut taxes and boost infrastructure, with the potential to drive more investors to gold as a safe haven if stock markets fall, analysts and traders said
Spot gold was down 0.2 percent at $1,242.31 per ounce by 0651 GMT. On Thursday, it touched its strongest since Feb. 28 at $1,253.12. The yellow metal was on track for its second straight week of gains.
U.S. gold futures were down 0.4 percent at $1,242.20.
"If the (healthcare) vote is to pass the reforms, gold could face pressure. But, if it encounters problems, we might chase a previous high at around $1,260," a precious metals trader said.
The dollar recouped a little lost ground on Friday amid signs the delayed healthcare vote would go ahead later in the day - though it remained unclear whether it would pass.
The dollar index, which measures the greenback against a basket of currencies, rose 0.2 percent to 99.956. It hit a seven-week low of 99.547 on Wednesday.
"The yellow metal continues to see solid interest underneath $1,245, however should prices fail again at $1,250 we may see this support level broken to test $1,230 - $1,235," MKS PAMP Group trader Sam Laughlin said.
Spot gold is still targeting $1,237 per ounce, as it faces a strong resistance zone of $1,247-$1,254, Reuters technical analyst Wang Tao said.
"We suspect that short-term long positioning has become extended and may be vulnerable to a correction," said Jeffrey Halley, senior market analyst at OANDA.
"A break of $1,242.50 should see some stop-loss sell action appear as traders reduce longs, after which gold will most likely move to the nuances of Washington D.C. headlines."
Spot silver fell 0.2 percent to $17.51 an ounce, after hitting over two-week high of $17.69 in the prior session.
Platinum dropped 0.7 percent to $951.50. Palladium rose 0.4 percent to $801. It climbed to a peak of $808.70 in the prior session, its highest since March 2015.
Source: Reuters
