Gold prices inch down as dollar creeps away from multi-month lows

London (July 19)  Gold prices edged lower on Wednesday as the dollar took a breather after plunging to multi-month lows, although fading prospects for U.S. monetary
tightening this year and political gridlock in Washington continued to pressure the greenback.

The dollar stayed on the defensive and remained near over 10-month lows as investors wagered any further tightening in the United States would be slow at best, while optimism on China's
economy underpinned Asian shares and commodities.      
           
"We still remain somewhat neutral on gold this year despite a rather good run of late," said Edward Meir, analyst at INTL FCStone. "Still, we are not overly bearish on the precious metal
at this stage either, as the backdrop of a falling dollar is too difficult to ignore."

Weighing on the dollar was the collapse of Republican efforts to overhaul or repeal Obamacare in the U.S. Senate on Tuesday, dealing a sharp setback to Trump and the Republican
Party's seven-year quest to kill former President Barack Obama's signature healthcare law.            

The recent strength (in gold prices) is due to currency dynamics more than anything else," said Mark Keenan, commodity strategist at Societe Generale.
 "We continue to forecast lower prices moving forward," Keenan said.
 

Spot gold fell 0.2 percent to $1,240.11 per ounce at 0702 GMT. In the previous session, it hit its highest since June
30 at $1,244.56.  

U.S. gold futures  for August delivery fell 0.2
percent to $1,239.50 per ounce.
     "We think the market may have done too much, too quickly
for the time being and may be in store for a breather," Meir
said.   
    Spot gold may rise more to $1,250 per ounce, as it has
cleared resistance at $1,239, according to Reuters technical
analyst Wang Tao.
    "Support appears at the 200-day moving average around $1,230
an ounce," said analysts at ScotiaMocatta, adding that they
would remain bullish on gold as long as it closes above that
level.
    Meanwhile, holdings at the SPDR Gold Trust      , the
world's largest gold-backed exchange-traded fund, fell 0.68
percent to 821.45 tonnes on Tuesday from 827.07 tonnes on
Monday.                
    In other precious metals, silver dropped 0.1 percent
to $16.24 per ounce, after touching its highest in about two
weeks in the previous session.
    Platinum  eased 0.4 percent to $918.45 per ounce. On
Monday, it marked its highest since mid-June.
    Palladium  fell 0.3 percent to $860.55 per ounce.

Reuters