On Friday, gold prices inched up in Asian trade, leading to their first weekly gain in four, as the dollar slid on the worries about the development of U.S. tax reform.
Spot gold jumped about 0.2 percent at $1,254.74 per ounce. It has gained 0.5 percent so far this week. US gold futures remained steady at $1,257 per ounce.
The dollar dropped 0.1 percent at ¥112,26.
“The U.S. dollar is weakening a little and that’s benefiting gold,” said Ronald Leung, chief dealer at Lee Cheong Dealers in Hong Kong.
The efforts of President Trump to win passage of an extensive tax bill in the U.S. Congress hit possible obstacles on Thursday when two or more Republican senators insisted on alterations.
“After the Fed announcement, it seems like short-covering pushed up gold to $1,260. Between the now and towards the end of the year, I think markets will be a bit quiet. The downside will be between $1,240-$1,245 and upside $1,260-$1,265,” Leung said.
On Wednesday, the U.S. central bank delivered a much-anticipated increase in interest rates for the third time this year but maintained its outlook of three rate hikes in the next year unchanged.
“It (gold) could merely be positioning after FOMC (Federal Open Market Committee) and short-covering after gold’s fall just before the meeting,” said Barnabas Gan, an OCBC analyst.
“Given the uncertainty over the tax reform, we would wait for more concrete news over how it may pan out before formulating a view,” said Gan, adding that a continued global growth backdrop and higher rates should endorse yield-chasing behavior and pull gold prices down in 2018.
Greater U.S. interest rates tend to increase the dollar and lift bond yields up, weighing on greenback denominated, non-interest bearing gold.
In a separate news, Asian stocks were up on Friday and the euro slipped after the European Central Bank (ECB) indicated it would remain stimulus for as long as necessary.
Spot gold was anticipated to examine a resistance at $1,262 per ounce, a break above which could cause to gain to the succeeding resistance at $1,276, a technical analyst said.
In other precious metals, silver was 0.2 percent higher at $15.19 ounce. Platinum gained 0.2 percent to $880.50 per ounce, while platinum dipped 0.3 percent at $1,030.15.
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