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Gold Rises as Dollar Falls
DOW JONES & COMPANY, INC. 6:49 AM ET 2/24/2017
LONDON--Gold prices rose Friday as the dollar continued to weaken in the wake of Federal Reserve minutes and comments from U.S. Treasury Secretary Steven Mnuchin this week.

Gold was up 0.5% at $1,255.92 a troy ounce on Friday. The price had spiked in the previous session, breaking out of a narrow range in the $1,230's that had held for over a week, after Mr. Mnuchin said Thursday it would take time for Donald Trump's government to enact fiscal reform.

The move higher in the precious metal tracked a selloff in the U.S. dollar that made dollar-priced commodities like gold cheaper for holders of other currencies. The WSJ Dollar Index fell to a two-week low and continued to weaken Friday, declining 0.05% to 90.71.

U.S. Treasury yields also declined as investors inched back their expectations of rate rises. Higher rates increase the appeal of yield-bearing assets relative to gold.

The continuing uncertainty over U.S. economic policy under the Trump administration was also noted in the minutes from the Federal Reserve's most recent meeting, a counterpoint to policy makers' assertion that rates could rise "fairly soon."

Analysts at Commerzbank said there could be "technical follow-up buying" if gold breaks through its 200-day moving average, which currently lies around $1,264, according to FactSet data. Some algorithmic traders are programmed to buy or sell when prices charts break through certain technical levels.

Analysts at ING noted a continuing flow of money into exchange-traded funds that buy gold, and predicted that demand is "likely to continue growing" this year, given persistent political uncertainty. Total holdings have recovered to their highest since December, when predictions of accelerating inflation and higher bond yields under the Trump administration were depressing demand for gold.

Silver was up 0.6% at $18.29 an ounce, palladium was up 0.8% at $781.25 an ounce and platinum gained 1% to $ 1,020.75 an ounce.

Write to Ed Ballard at [e-mail]


(END) Dow Jones Newswires
02-24-170649ET
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