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•        Gold prices on Thursday held below a three-week peak hit in the prior session, as the dollar recovered from seven-week lows and markets looked to see if US President Donald Trump could push through a healthcare bill.

 

•        Spot gold was down 0.2% at $1,246.51 per ounce at 9.23am. On Wednesday, it touched its strongest since 28 February at $1,251.26.

 

•        “There is a strong technical resistance at $1,250 and that seems to have been felt strongly at this juncture,” OCBC analyst Barnabas Gan said.

 

•        Spot gold may retrace to a support at $1,237 per ounce, following its failure to break a resistance zone of $1,247-$1,254, according to Reuters technical analyst Wang Tao.

 

•        However, Gan pointed to the impact of sustained political issues in Europe and the United States.

 

•        “This kind of uncertainty does lift gold prices,” he said.

 

•        The immediate focus is on whether Trump can gather enough support in a vote as early as Thursday to pass a bill to roll back Obamacare, a first major test of his legislative ability and whether he can keep his promises to business.

 

•        However, a rough ride for the healthcare plan could affect Trump’s efforts to cut taxes and boost infrastructure, and drive more investors into gold as a safe-haven investment if stock markets fall, analysts and traders said.

 

•        The dollar index, which measures the greenback against a basket of currencies, was up 0.1% at 99.782. It fell to a near seven-week low of 99.547 on Wednesday.

 

•        Spot silver rose 0.2% to $17.53.

•        Gold prices rose for a sixth consecutive day, extending the longest winning streak since mid-January. The US Dollar edged lower against most of its major counterparts and Treasury bond yields declined as the priced-in Fed rate hike path continued to flatten. Not surprisingly, this offered a lift to non-interest-bearing and anti-fiat assets including the yellow metal.

 

•        Significant follow-through seems unlikely in the near term however, with traders probably leery of overcommitting ahead of an upcoming speech from Fed Chair Janet Yellen. Remarks from Minneapolis Fed President Neel Kashkari – the sole dissenting vote against the rate hike announced last week – are also on tap. Yellen’s usually measured remarks and Kashkari’s dovish leanings may see gold continue upward.