Gold hit its highest in almost seven weeks at $1,270 during the session on Monday, boosted by struggling U.S. economic data that cast doubt on whether the Federal Reserve will raise rates again this year. Spot gold was down 0.1 percent at $1,267 an ounce. Dollar weakness on top of U.S. political risks, disappointing economic data, is driving the gold price. The dollar index fell to an almost 16-month low on Monday, crossing below the key mark of 93, and is inevitable to move further down.
Fed Chairman Stanley Fischer said uncertainty over the outlook for U.S. healthcare, regulation, taxes and trade could prompt firms to delay projects until the policy environment is clearer.
However, weak physical demand is expected to limit gold's gains. Gold prices in India last week recorded the biggest discount in seven months as a rebound in prices curtailed retail demand, while lower premiums in other Asian centers failed to lure customers amid a seasonal slowdown.
On chart, gold extended gains to the third consecutive week, nearing the weekly resistance of 1,280. A fierce fight can be expected at this level. A successful breakthrough could undermine its long-term trend. But signs were unclear at this moment.
Silver rose 0.8 percent to $16.79 an ounce on Monday, hitting the highest since June 29 at $16.88. The white metal rebounded for the fourth straight week, currently under the key resistance of $16.83. A breakthrough would lift prices to the 200-week moving average of $17.4 in the medium term. Near-term support can be found at $16.72.

 
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