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Gold prices reversed course and turned lower on Thursday, after earlier touching a two-week high, as the dollar edged up. Spot gold was down about 0.1 per cent at $1,265.02 an ounce as of 0816 GMT, after earlier hitting its best since Dec. 6 at $1,268.26. US gold futures fell 0.1 percent at $1,268.30 an ounce.
“The current weakness in the gold price is mainly due to the strength of the dollar,” said Naeem Aslam, chief market analyst at Think Markets UK.
The dollar edged higher against the yen on Thursday, after comments by Bank of Japan Governor Haruhiko Kuroda reinforced expectations that the BOJ was in no hurry to move away from its ultra-loose monetary policy.
Earlier in the session, gold prices hit a two-week high, helped by seasonal demand and steady closes on the technical charts, a Hong Kong-based trader said. The 200-day moving average around $1,269.50 is currently weighing upon any attempts higher (for gold), MKS PAMP trader Sam Laughlin said in a note.
US tax bill
A rise in US bond yields from optimism after lawmakers in the United States approved the biggest overhaul of the country's tax code in 30 years, also offered support to the greenback. Rising bond yields tend to boost the dollar and weigh on the appeal of non-interest bearing gold.
Asian stocks, however, traded lower as cheer waned after the passage of the Bill with investors remaining divided on its impact on the U.S. economy. “We think that the pullback in the equity market could bring some shine for the yellow metal,” Aslam said.
"Trump's threat to withdraw aid for the countries which have voted against his Jerusalem decision also clearly states that geopolitical tensions aren't going away anytime soon and they could support the metal price in the long-term.”
US President Donald Trump had on Wednesday threatened to cut off financial aid to countries that vote in favor of a draft United Nations resolution calling for the United States to withdraw its decision to recognise Jerusalem as Israel's capital.
Among other precious metals, spot silver was unchanged at $16.17 an ounce, having climbed to a two-week top of $16.26 in the previous session. Platinum was 0.5 per cent lower at $913.50 an ounce, after marking its best since December 5 in the previous session. Palladium gained 0.2 per cent to $1,027.57.
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