Gold surged above $1,200 an ounce to its highest in seven weeks on Thursday as the dollar fell after US President-elect Donald Trump's long-awaited news conference gave few details on economic policy. But analysts warned that gold's revival since mid-December may be running out of steam as the dollar was likely to rebound once Trump moves ahead with his economic plans.
Spot gold was up 0.5 percent at $1,197.64 an ounce by 2:35 p.m. EST (1935 GMT), after touching $1,206.98, its loftiest since Nov. 23. US gold futures settled up 0.3 percent at $1,199.80 per ounce. Trump delivered a wide-ranging briefing on Wednesday that lasted longer than expected but contained no details on tax cuts and infrastructure spending, analysts said.
That sent the dollar index sliding to the lowest in nearly five weeks. "It's a mess frankly, which is a reflection of the fact that there's no clarity on US economic policy," said Tom Kendall, head of precious metals strategy at ICBC Standard Bank. Gold is up around 7 percent since hitting a 10-1/2-month low on Dec. 15.
"Despite moving back to $1,200 per ounce, we see no lasting recovery for gold," said Carsten Menke, commodities research analyst at Julius Baer in Switzerland. "The market lacked support from physical buying ... which we believe is a precondition for a lasting recovery." The outlook for US rates may become a little clearer when Federal Reserve Chair Janet Yellen appears at a webcast town hall meeting with educators on Thursday. "Trump's election has introduced a proliferation of unknowns, which the market will have to work through as they surface," RBC Capital Markets said in a note. Spot silver was up 0.4 percent at $16.79 an ounce after hitting a four-week high of $16.98. Platinum climbed 0.6 percent to $978.30, after touching a high of $990.10, its strongest since Nov. 10. Palladium added 0.5 percent at $758.