By Zandi Shabalala
LONDON Gold slipped from a two-month peak on Tuesday as investors took stock of U.S. President Donald Trump's first policy moves and the dollar stabilised after plumbing seven-week lows this week.Trump formally withdrew from the Trans-Pacific Partnership trade deal on Monday and told U.S. manufacturing executives he would impose a hefty border tax on firms that import products after moving American factories overseas."It's all been flagged and it's all playing out according to the well-rehearsed script of Trump and his advisers," Robin Bhar, Societe Generale's head of metals research, said."The high in gold is an opportunity to take a bit of profit," Bhar said, adding that the price was stuck in a $1,120-$1,220 range. Trump's protectionist statements and a lack of detail on policy have led some investors to opt for gold, which is often seen as an alternative investment in times of geopolitical and financial turmoil. It rose to its highest level since Nov. 22 during Tuesday's session before giving back gains.
Spot gold was down 0.3 percent at $1,214.53 an ounce after peaking at $1,219.59. U.S. gold futures slipped 0.2 percent to $1,213.The dollar index, which measures the greenback against a basket of currencies, hovered near 100.070 after falling to a seven-week low of 99.899 in the previous session.Analysts said the gold market was seeking clarity from Trump's administration on tax and spending policies that could impact growth and provide clues on the direction of U.S. interest rates.
"The focus is going to be about what Trump and his team are going to do in terms of cutting corporation tax and incentivizing U.S. companies to bring back profits held overseas," ICBC Standard Bank analyst Tom Kendall said."It's those kinds of fiscal policies that will be important for gold."
Volumes and buying demand on the Shanghai Gold Exchange are expected to start drying up between now and the week-long Lunar New Year break, MKS PAMP Group trader Alex Thorndike said.Silver lost 0.3 percent to $17.13 per ounce, while platinum gained 0.6 percent to $982.7. Palladium was up 0.4 percent at $781 an ounce after hitting $795.60, its highest since May 2015, in the previous session. (Additional reporting Arpan Varghese and Nallur Sethuraman in Bengaluru; Editing by Alexander Smith and Dale Hudson)
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Updated Date: Jan 24, 2017 22:15:05 IST