Gold steady ahead of Trump policy speech

Gold steady ahead of Trump policy speech
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BENGALURU (Feb 28): Gold prices held steady on Tuesday after falling from a 3-1/2 month high in the previous session, with investors looking towards a speech later in the day by U.S. President Donald Trump for more clarity on his economic policy.

Spot gold was up 0.1% at US$1,253.93 per ounce at 0734 GMT. The metal hit its highest since Nov 11 at US$1,263.80 on Monday. 

U.S. gold futures fell 0.3% to US$1,254.50.

Investors are shifting their attention to Trump's policy speech to a joint session of Congress on Tuesday night, where he is expected to provide clues on his plans to cut taxes.   

"While it is expected (Trump) will announce pro-growth policies there is still large underlying support for the metal and will continue to be until these announcements turn into action," said MKS PAMP Group trader Sam Laughlin.

"The key for a leg higher is a sustained move through the 200-day moving average, currently sitting at US$1,261.20."

President Donald Trump on Monday said he would propose a budget that would ramp up spending on defence, but seek savings elsewhere to pay for it.  

"A possible setback could set in (gold) over the next 24 hours, but we still could end the week on a firmer note, especially if Janet Yellen’s testimony on Friday lays open the possibility that the Fed will likely pass on a rate move in March," said INTL FCStone analyst Edward Meir.

A delay in an interest rate hike by the U.S. Federal Reserve would be positive for non-interest bearing bullion, while also keeping the dollar weaker, making the dollar-denominated metal more appealing to buyers paying in other currencies. 

However, there are still some Fed officials pushing for a rate increases as soon as next month. 

"Persistent speculation about Greek fiscal policy and looming elections in the Netherlands and France are contributing to the geopolitical uncertainty on the part of the European continent," Heraeus Metal Management said in a note.

"We continue to see gold well supported — overcoming resistance at US$1,249 (per ounce) may suggest higher prices. We see the next resistance level at US$1,278 and also the US$1,300 mark is moving into the sight of investors."

Spot gold is still targeting US$1,278 per ounce, following its break above resistance at US$1,249, Reuters technical analyst Wang Tao said.

Spot silver rose 0.3% to US$18.33 an ounce. The metal hit a 3-1/2-week high at US$18.48 in the previous session. 

Platinum was firm at US$1,028 per ounce, after touching a five-month high at US$1,044.10 in the prior session.

Palladium was also firm at US$781 per ounce.