Gold slipped on Thursday as the dollar firmed, while palladium extended gains to hit a two-year high on economic data and demand from the automobile sector. Spot gold was down 0.3 percent at $1,245.26 an ounce by 2:21 pm EDT (1821 GMT), retreating from an intraday peak of $1,253.12, its highest since February 28. US gold futures shed 0.3 percent to $1,246.60.
"The dollar has been a little bit stronger today, interest rates climbed up a touch and the stock market finally gave a positive performance prior to tonight's vote on healthcare - all of which means gold traders have pulled back a little," said George Gero, managing director at RBC Wealth Management. The dollar index, which measures the greenback against a basket of currencies, was slightly firmer at 99.769. It had dropped to its lowest in nearly seven weeks at 99.547 on Wednesday.
US stocks rose slightly on Thursday, with gains limited by signs that President Donald Trump was struggling to get enough votes to pass a healthcare bill in Congress, while European shares rose on bank borrowing and oil prices slipped. The immediate focus is on whether Trump can gather enough support to pass a bill to roll back Obamacare, representing a major test of his legislative ability and whether he can keep his promises to business.
A rough ride for the healthcare plan could affect Trump's efforts to cut taxes and boost infrastructure, with the potential to drive more investors to gold as a safe haven if stock markets fall, analysts and traders said. The dollar briefly slipped on Thursday after US jobless claims rose unexpectedly, sending gold temporarily higher. From a technical standpoint, gold's almost "V-shaped recovery" from the key $1,200 handle suggests more gains are likely, analysts said. Palladium climbed to a peak of $808.70, its highest since March 10, 2015, before paring gains to $799.60 for a rise of 1.7 percent. Palladium is mainly used in catalytic converters that curb pollution from vehicle exhausts.
Spot silver rose 0.3 percent to $17.56, while platinum advanced 0.3 percent to $962.40.
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