Picture: BLOOMBERG
Picture: BLOOMBERG

Bengaluru — Gold prices rose on Friday as the dollar weakened after a report that investigators looking into possible Russian interference in the 2016 US presidential election had subpoenaed President Donald Trump’s election campaign for documents.

Special counsel Robert Mueller’s team issued the subpoena last month for documents containing specified Russian keywords from more than a dozen officials, the Wall Street Journal reported.

Spot gold had climbed by 0.3% to $1,282.72/oz by 4.29am GMT. It is up about 0.5% for the week, in what could be its second consecutive weekly gain. US gold futures for December delivery rose 0.4% to $1,282.70.

"The fall in the dollar and strengthening in Asian currencies have made gold attractive for Asian investors," said John Sharma, an economist with National Australia Bank.

However, uncertainty surrounding a US tax reform bill and a likely interest rate hike by the Federal Reserve next month are sending mixed signals to the market, keeping gold range-bound, he said.

"Prices should likely continue to hover between $1,260 and $1,290 in the short term," he added.

Republican US legislators on Thursday took an important step towards the biggest tax code overhaul since the 1980s as the House of Representatives approved a broad package of tax cuts sought by Trump.

"Gold prices will continue a sideways drift in the coming months as rising nominal interest rates in the US keep a lid on investment demand," BMI Research said in a note. "Prices will grind moderately higher in the longer term as developed market inflation rebounds."

San Francisco Fed president John Williams reiterated his view on Thursday that the US economy was growing strongly enough for the Fed to continue raising rates gradually over the next couple of years to around 2.5%.

Meanwhile, Cleveland Fed president Loretta Mester said on Thursday she felt inflation was poised to pick up, clearing the way for the Fed to continue its gradual process of raising interest rates.

Spot gold was biased to rise above a neutral range of $1,270/oz-$1,286/oz, and gain further towards $1,298, said Reuters technicals analyst Wang Tao.

The dollar index against a basket of six major currencies was down 0.3%.

In other precious metals, silver was up 0.1% at $17.098/oz. For the week, silver has risen 1.1%, in what could be its best week in five.

Platinum rose 0.4% to $934.50 and palladium gained 0.3% to $990.25. Platinum is up about 1.1%, heading for a third consecutive weekly rise, while palladium is down 0.3%.

Reuters

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