• Gold prices eased as the dollar recovered from seven-week lows on Tuesday, sliding after the yellow metal hit two-month highs earlier in the session amid signs that U.S. President Donald Trump would adopt a protectionist stance on trade.
Spot gold slid 0.3 percent to $1,214.2 per ounce by 0649 GMT, after hitting its strongest since Nov. 22 at $1,219.59 earlier in the session.
"For the time being, we suspect that gold will likely push higher, as improving chart patterns, unease about Trump's policies, growing perceptions that the Fed will be relatively quiet for a while and pressure on the dollar, all provide an element of support," INTL FCStone analyst Edward Meir said.
• The dollar index, which measures the greenback against a basket of currencies, inched up 0.1 percent at 100.210. In the previous session, it hit a more than 7 week low of 99.899.
• "We are looking at gold hitting $1,250 within weeks. The rationale is very simple. The market was in honeymoon with Trump. With him in power now, the reality starts to bite," said Dominic Schnider of UBS Wealth Management in Hong Kong.
• "Regardless of Trump, the main story for gold is negative interest rates in the U.S. We are not expecting the Fed to raise rates in March and it's just going to be two hikes and that's roughly priced in to the market," Schnider said.
• Spot gold looks exhausted and may again fail to break a strong resistance at $1,219 per ounce before retracing towards a support at $1,196, according to Reuters technical analyst Wang Tao.
• Volumes and buying demand on the Shanghai Gold Exchange are expected to start drying up between now and the week-long Lunar New Year break, MKS PAMP Group trader Alex Thorndike said.
• Among other precious metals, silver shed 0.4 percent to $17.13 per ounce, while platinum was steady at $981.
• Analysts at HSBC look for gold-price volatility under new U.S. President Donald Trump and also anticipate that his policies ultimately will be bullish for the metal.
Comments that may raise uncertainty or geopolitical risk are also likely to boost gold. The bank said Trump’s cabinet and agenda so far appear to have two broad themes, describing one as bullish for gold and the other as neutral or possibly bearish.
Reference: Scrapregister,Reuters
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