Gold prices inched higher in quiet trade on Wednesday as the dollar held steady on expectations the US government would pass the country's biggest tax overhaul in 30 years. Spot gold had risen 0.2 per cent to $1,263.65 an ounce by 0347 GMT. US gold futures were also up 0.2 per cent at $1,267 an ounce.
“There is no news driving this other than perhaps some risk-aversion as Bitcoin fell by 10 per cent overnight,” said Jeffrey Halley, a senior market analyst with OANDA. Digital currency Bitcoin was down 5 per cent on the Bitstamp exchange at $16,810, after earlier dropping to a one-week low at $15,800.
“Gold has resistance at $1,265 followed by the 200-day moving average at $1,269,” Halley said, adding that immediate support for the metal would come in at $1,261 an ounce.
Meanwhile, the dollar was supported after the House of Representatives had on Tuesday approved the proposed US tax overhaul, though Congressional Republicans will likely need to hold another vote later on Wednesday due to procedural issues.
“The better-than-expected housing data in the US weighed on investor appetite. A lack of safe-haven buying, as well as stronger equity markets have been a major factor behind the lacklustre performance in recent weeks,” ANZ analysts said in a note.
Upbeat US housing data and the House's approval of the tax overhaul boosted US Treasury yields. “Gold is coming up from a cyclical bottom. It's going to get quieter due to the upcoming holiday long-weekends,” said Mun Chun Loh, Director, Private Wealth at GoldSilver Central Pte Ltd in Singapore.
“All we see is a bit of book positioning in anticipation of adjusting their positions for the next 2-3 weeks ahead.”
Silver was up 0.1 per cent at $16.13 an ounce, after touching a two-week high of $16.22 in the previous session. Platinum was nearly unchanged at $913.40 an ounce, having hit a two-week peak of $919.40 on Tuesday. Palladium was up 0.1 per cent at $1,021.65 an ounce