December 15, 2017 / 4:47 AM / 10 months ago

PRECIOUS-Gold edges up as dollar slips on U.S. tax bill worries

    * Spot gold headed for first weekly gain in four
    * Gold expected to test resistance at $1,262/oz - technicals

 (Adds comment, updates prices)
    By Apeksha Nair
    Dec 15 (Reuters) - Gold edged higher in Asian trade on
Friday, heading for their first weekly gain in four, as the
dollar sagged on concerns about the progress of U.S. tax reform.
    "The U.S. dollar is weakening a little and that's benefiting
gold," said Ronald Leung, chief dealer at Lee Cheong Gold
Dealers in Hong Kong.    
    Spot gold        was up 0.3 percent at $1,256.59 an ounce at
0753 GMT, and has gained less than 1 percent so far this week.
U.S. gold futures         were up 0.2 percent at $1,259 an
ounce. 
    The dollar weakened against the yen        as wrangling over
a bill to change the U.S. tax code dented invesor confidence.
        
    President Donald Trump's efforts to win passage of a
sweeping tax bill in the U.S. Congress hit potential obstacles
when two more Republican senators insisted on changes, joining a
list of lawmakers whose support is uncertain.             
    While uncertainty over U.S. tax reform has hurt the dollar
and boosted gold, OCBC analyst Barnabas Gan said expectations of
sustained global economic growth and higher interest rates
should drag down gold prices in 2018.
    The U.S. Federal Reserve on Wednesday raised benchmark
interest rates for the third time this year as expected, but
kept its outlook of three rate rises in the next year unchanged.
            
    Higher U.S. interest rates tend to boost the dollar and push
bond yields up, weighing on greenback denominated, non-interest
bearing gold.
    "Between 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," said Leung at Lee
Cheong Gold Dealers. 
    Technical charts show spot gold could test resistance at
$1,262, a break above which could lead to a gain to the next
resistance at $1,276, said Reuters technicals analyst Wang Tao.
            
    In other precious metals, silver        was flat at $15.87
an ounce and platinum        rose 0.4 percent to $881.80 an
ounce. Palladium        was down 0.1 percent at $1,031.99.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Manolo
Serapio Jr.)
  
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