LONDON: Gold was on track for a second weekly gain on Friday as concern about the ability of US President Donald Trump to push legislation through Congress held the dollar near 7-week lows, making bullion cheaper for holders of other currencies.
Spot gold was up 0.1 per cent at $1,245.53 an ounce at 1131 GMT. The metal has risen 1.4 per cent this week and on Thursday touched $1,253.12, its highest since Feb. 28.
US gold futures were down 0.1 per cent at $1,245.50.
Gold, seen as a safe haven asset, has benefited from falls in the dollar, US bond yields and stocks as Trump’s difficulty in passing health care reform has undermined faith that he can deliver on promises of tax cuts and investment.
“This is a key event not just for gold but for all risk assets,” said Robin Bhar at Societe Generale.
“We should see some safe haven flows into gold if he can’t get it passed because it means all his other programs have a low probability of succeeding,” he said.
Failure to pass the bill could push gold through technical resistance at around $1,250.
“If the market can consolidate above $1,250 in the coming days we could see an attempt at the 200-day moving average of $1259.50,” said Tim Brown at MKS PAMP in a note.
Away from Congress, focus could move to the US Federal Reserve. Three Fed officials, Charles Evans, James Bullard and William Dudley, are due to speak on Friday.
Investors are wary that the Fed could increase the pace of interest rate rises, which tend to pressure gold prices by lifting the opportunity cost of holding non-yielding bullion and boosting the dollar, in which gold is priced.
“Even the doves (are) now openly talking about the need for another three hikes this year,” analysts at ING wrote in a note.
In other precious metals, silver was up 0.2 per cent to $17.58 an ounce. Platinum was 0.3 per cent lower at $955.25 an ounce.
Palladium was up 0.9 per cent at $806 an ounce, close to a two-year high of $808.70 hit in the previous session.
The metal used in catalytic converters that curb pollution from vehicle exhausts has risen 4 per cent this week thanks to strong economic data and demand from the automobile sector.
