Gold dips on firmer dollar but stays close to 1-month peak
Gold eased on Monday due to a stronger U.S. dollar, but remained near a one-month high hit in the previous session on uncertainty over progress on a potential overhaul of the U.S. tax code.
Spot gold was down 0.2 percent at $1,291.44 per ounce by 0757 GMT, but not far off Friday`s peak of $1,297, its strongest level since Oct. 16.
U.S. gold futures for December delivery dropped 0.4 percent to $1,291.20.
"Friday`s move higher has definitely improved gold`s chart patterns, but it remains to be seen if this will be enough to attract fresh fund buying," INTL FCStone analyst Edward Meir said in a note.
"Much of this will depend on the progress (or lack thereof) that the U.S. tax bill makes in the Senate. If efforts to pass it flounder, we could see a much sharper correction set in over U.S. equities, prompting another leg higher in gold."
U.S. President Donald Trump would not insist on including repeal of an Obama-era health insurance mandate in a bill intended to enact the biggest overhaul of the tax code since the 1980s, a senior White House aide said on Sunday.
"The apparent difficulty in getting tax cuts approved in the U.S. Senate has seen investors return to safe-haven assets," ANZ analysts said in a note.
Spot gold may retest a resistance level of $1,298, a break above which could lead toward the next resistance level at $1,309, according to Reuters technical analyst Wang Tao.
Gold could easily push higher and potentially above $1,300, said Jordan Eliseo, chief economist at gold trader ABC Bullion.
"A little bit of momentum is creeping in this market, so that shouldn`t be a surprise. Meanwhile, a little bit of volatility is creeping up in other financial markets," he said.
The dollar index, which tracks the greenback against a basket of six rival currencies, gained 0.2 percent as the euro faltered after German Chancellor Angela Merkel`s efforts to form a three-way coalition government failed, raising concerns over political uncertainty in the euro zone`s largest economy.
Hedge funds and money managers raised their net long positions in COMEX gold and silver contracts in the week to Nov. 14, data showed on Friday.
Silver fell 0.8 percent to $17.16 an ounce after hitting a one-month high in the previous session, while platinum retreated from Friday`s near two-month peak of $954.30 and was down 0.8 percent at $943.40.
Palladium rose 0.3 percent to $996 an ounce.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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