Gold bars are seen at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria. File Picture: REUTERS/LEONHARD FOEGER
Gold bars are seen at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria. File Picture: REUTERS/LEONHARD FOEGER

Bengaluru — Gold prices rose to a two-week high on Tuesday as the dollar dipped to multi-month lows amid fading prospects of further rate increases by the US Federal Reserve in 2017 and doubts whether President Donald Trump would be able to push through healthcare reforms.

Asian shares stepped back from more than two-year highs on Tuesday, while the dollar extended losses as passage of a US healthcare bill grew doubtful and investors bet the Fed would be more cautious about raising interest rates.

"With the street repricing its US interest rate outlook following soft data and a dovish [Fed chairwoman Janet] Yellen, and with President Donald Trump’s reflationary reforms seemingly lost in the legislative Bermuda Triangle of Congress, a weaker US dollar should continue to support gold," said Jeffrey Halley, a senior market analyst at Oanda.

Republican senators Jerry Moran and Mike Lee announced their opposition on Monday to a revised Republican healthcare bill, delivering a serious blow to the legislation.

Spot gold rose 0.3% to $1,237.05/oz at 3.28am GMT, after touching $1,238.27, the highest since July 3, earlier in the session. US gold futures for August delivery rose 0.3/oz to $1,236.90/oz.

"At this moment, gold is likely to be in the trading range of $1,200-1,250," said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.

Prices of the metal were unlikely to significantly break above these levels since there were no other major drivers, including geopolitical factors, for gold as of now, he added.

Spot gold faced a resistance at $1,239/oz, and could temporarily hover below this level or retrace towards a support at $1,226, said Reuters technical analyst Wang Tao.

Meanwhile, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), said its holdings fell 0.21% to 827.07 tonnes on Monday from 828.84 tonnes on Friday.

In other precious metals, silver rose 0.7% to $16.18/oz.

Platinum fell 0.2% to $919.75/oz. It had touched an over one-month high of $934.40 in the previous session.

Palladium was up 0.2% to $866.50/oz.

Reuters

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