February 28, 2017 / 11:12 AM / a year ago

PRECIOUS-Gold turns lower ahead of Trump policy speech

    * Trump to speak on tax cuts and spending
    * Gold and silver hit 3-1/2-month highs in previous session
    * Coming up: Trump speaks to Congress at 0200 GMT

 (Recasts; updates prices; adds comment, byline, NEW YORK
    By Marcy Nicholson and Zandi Shabalala
    NEW YORK/LONDON, Feb 28 (Reuters) - The price of gold turned
downward on Tuesday as the dollar came off its lows and
financial markets awaited U.S. President Donald Trump's speech
to Congress later this evening regarding his policies on tax
reforms and government spending.
    Spot gold        was down 0.1 percent at $1,250.93 an ounce
by 3:10 p.m. EST (2010 GMT), below the previous session's
3-1/2-month high of $1,263.80. It was on track to finish
February up around 3.3 percent, marking its second straight
monthly rise.
    U.S. gold futures         settled 0.4 percent lower at
$1,253.90 an ounce .
    The dollar index       , in which gold is priced, was flat
after falling 0.3 percent. Major stock markets dipped while U.S.
Treasury yields came off their session lows.            
    Investors are shifting their attention to Trump's policy
speech to a joint session of Congress at 9 p.m. EST (0200 GMT
Wednesday), when he is expected to provide clues on his
tax-cutting plans.             
    "The dollar did change a little bit. There was maybe a bit
of book squaring ahead of Mr. Trump's speech," said Bill
O'Neill, co-founder of LOGIC Advisors.
    "Every market today seemed to be focusing on this and is
cautious as a result of that."
    The president had already said on Monday that he would
propose a budget that would increase spending on defense while
seeking savings elsewhere.                          
    "There is elevated uncertainty ahead of the (Trump) speech.
It's clear that there is a lot of doubt expressed about how much
Trump's policies are going to be pro-growth and pro-inflation,"
ETF Securities analyst Nitesh Shah said.
    INTL FCStone analyst Edward Meir said in a note that any
price movement following Trump's speech was likely to be
short-lived because "many of the proposals need to translated
into actual legislation and also need congressional approval."
    "Gold is currently stuck in a rather strong bullish trend as
characterized by shallow retracements followed by quick trend
resumption," said Fawad Razaqzada, technical analyst for
    "Thus, Monday's retreat from the 200-day moving average,
while noticeable, could prove to be another ploy to get the
bears trapped before it continues higher," he added.
    Spot silver        rose 0.4 percent to $18.33 an ounce, in
sight of the 3-1/2-week high of $18.48 set in the previous
    Platinum        shed 0.2 percent at $1,025.80 after scaling
a fresh five-month high on Monday at $1,044.10. Palladium       
fell 1.5 percent to $768.97.

 (Additional reporting by Nallur Sethuraman in Bengaluru;
editing by Greg Mahlich, G Crosse)
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