March 22, 2017 / 12:14 PM / 2 years ago

PRECIOUS-Gold hits 3-week peak as equities ditched on Trump worries

    * SPDR Gold holdings up 0.5 pct after three sessions of
outflows
    * Silver and platinum off two-week highs hit in previous
session
    * Palladium hits highest in more than a month

 (Updates prices; adds comment, details, second byline, NEW YORK
dateline)
    By Marcy Nicholson and Zandi Shabalala
    NEW YORK/LONDON, March 22 (Reuters) - Gold climbed to a
three-week high on Wednesday as the dollar fell to seven-week
lows and bond yields sank on uncertainty over the economic
policies of U.S. President Donald Trump.
    Spot gold        was up 0.4 percent at $1,249.98 an ounce by
2:43 p.m. EDT (1843 GMT), close to the session high of
$1,251.26, the highest since Feb. 28.
    U.S. gold futures         settled up 0.3 percent at
$1,249.70. 
    Trump and Republican congressional leaders appeared to be
losing the battle to get enough support to pass their Obamacare
rollback bill. Mark Meadows, who heads the conservative House
Freedom Caucus, said his group had more than enough members to
stop the bill from passing.             
    The current House Republican rollback plan is scheduled for
a floor vote on Thursday.
   "I think that's giving the market more clarity that it's
probably not going to be passed, and they're reacting to that,"
said Ryan McKay, associate commodities strategist for TD
Securities in Toronto.
    "This could keep the Fed more measured regarding the pace of
rate hikes, which has seen yields, U.S. dollar, and equities
fall off while gold rallies."
    A lack of concrete policy from the Trump administration is
increasing gold's attraction as a safe-haven investment,
analysts and traders said.
    Most U.S. and European share indexes fell or were little
changed, while the greenback        extended losses to a
seven-week low against a basket of major currencies, on concerns
over potential delays to Trump's pro-growth policies unnerved
investors.            
    Gold was also supported by a further drop in U.S. Treasury
yields, with the 10-year benchmark yield              dipping to
the lowest since Feb. 28.
    Gold has rallied around $50 from last Wednesday's low and
clocked its longest winning streak since early January after a
less hawkish tone on interest rates in the U.S. Federal
Reserve's latest policy statement last week.
    "The repositioning of investors since the (Fed) meeting
continues unabated, with investors becoming less bearish as a
result of the subdued outlook for rates in 2018," ANZ analysts
said in a note.
    Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, rose 0.5 percent to 834.40
tonnes on Tuesday after three sessions of outflows.
    The gold market shrugged off what police called a terrorist
incident in London.             
    In other precious metals, spot silver        turned up 0.06
percent at $17.51 an ounce, while platinum        fell 0.8
percent at $959.
    Palladium        eased by 0.06 percent to $786.50 after
hitting $794.30, its highest since Feb. 17.

 (Additonal reporting by Nallur Sethuraman in Bengaluru; Editing
by David Goodman and Dale Hudson)
  
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