Trump's comments on strength of dollar prop up gold price

New York (Jan 17)  Gold jumped more than 1 percent to its highest in nearly eight weeks on Tuesday after U.S. President-elect Donald Trump said the dollar was "too strong",
sending the greenback lower.

Spot gold rose 0.7 percent to $1,217.11 per ounce by 1335 GMT, after touching a Nov. 22 high of $1,218.64 ounces. U.S. gold futures were up 1.3 percent at $1,210.70
per ounce. The dollar, in which gold is priced, fell half a percent to six-week lows against major currencies.

"Trump's stance on trade and protectionism has been well aired and it will always be a key factor. But until we get more clarity on what exactly it means, this should help to underpin
gold," said Societe Generale Head of Metals Research Robin Bhar.

In an article in the Wall Street Journal, Trump said the strength of the U.S. dollar against China's yuan "is killing us".
    Gold is often seen as an alternative investment during times
of geopolitical and financial uncertainty while riskier assets
such as stocks are hit.
    "This year there are lots of uncertain political events,
including elections, so if you looking for a bit of a refuge
from stormy seas gold will be one of those safe assets that you
would park some money in," Bhar said.
    Also boosting gold is uncertainty over Trump's plans for the
U.S. economy after his inauguration on Friday.
    Trump's campaign calls for tax cuts and more infrastructure
spending have boosted U.S. shares and the dollar, as well as
driving a selloff in Treasuries, but his protectionist
statements and a flurry of off-the-cuff Tweets have kept many
investors from adding to risky positions, instead opting for
gold.
    Trump's "unorthodox view of the world is certainly going to
contribute to much more volatility in the markets next year,"
said INTL FCStone analyst Edward Meir.
    Meanwhile, Prime Minister Theresa May said Britain would
make a definitive exit from the European Union and parliament
would be given a vote on its final terms, seen as a steadying
influence, and sending the pound higher. Gold, which had soared
in anticipation of May's  speech, retreated slightly on profit
taking, analysts said.
    Investor interest in gold was indicated as holdings of the
largest physically-backed ETF, New York's SPDR Trust, on
Friday rose for the first time since Nov. 9, the day after
Trump's election victory.
    Credit Suisse said in a note it remained "constructive" on
gold prices, forecasting an average of $1,338/oz in 2017.
    Spot silver was up 1.7 percent at $17 an ounce, after
scaling a one-month high. Platinum hovered near $986 per
ounce after touching a two-month high.
    Palladium added 1.3 percent at $754.

Source: Reuters