Trump to outline the fiscal plan, how would gold respond?

Gold has retreated from $1263.87 (highest since Nov 11, 2016) to $1245 (support offered by the rising trend line drawn from Jan 27 low and Feb 17 low).

The weakness in the Asian session could be explained by the 10 basis points rise in the three-month US treasury yield following hawkish comments from Fed’s William Dudley, Robert Kaplan and John Williams.

Impatient markets need details of the fiscal plan

The Trump trade looks exhausted and may fall apart if Trump is high on rhetoric and low on substance again. The risk-off tone in the markets could strengthen the haven demand for the yellow metal.

Moreover, Trump may have a hard time meeting expectations, given the hype surrounding his policy plan.

Nevertheless, markets could see Trump bump - II if Trump details the fiscal plan. That would also boost the treasury yields, Fed rate hike bets and the US dollar and thus weigh over gold.

Gold Technical Levels

The metal was last seen trading around $1244/Oz. A breakdown of support at $1240.88 (61.8% Fib expansion) could yield a sell-off to $1234.60 (Feb 14 high) and $1229.40 (50% Fib expansion). On the higher side, breach of $1249.31 (session high) could see prices revisit $1257.23 (78.6% Fib expansion) and $1263.87 (Feb 27 high).