Gold dips on firmer dollar ahead of Trump policy speech

(Reuters) - Gold slipped on Wednesday on a stronger dollar ahead of a speech by U.S. President Donald Trump that investors hope will shed more light on the details of his economic policy.

FUNDAMENTALS

* Spot gold > had dropped 0.3 percent to $1,244.93 per ounce by 0034 GMT. The metal hit its highest since Nov. 11 at $1,263.80 on Feb. 27.

* U.S. gold futures fell 0.7 percent to $1,245.

* World financial markets will be scrutinizing Trump's address in the House of Representatives at 0200 GMT for specifics on how he aims to make good on promises to tackle tax reform, boost infrastructure spending and simplify regulations he says are harming business. [nL2N1GD0FO]

 

* The president had already said on Monday that he would propose a budget that would increase spending on defence while seeking savings elsewhere. [nW1N1DV02L]

* The dollar index <.DXY> rose 0.4 percent.

* A handful of Federal Reserve policymakers on Tuesday jolted markets into higher expectations for a March U.S. interest rate increase, with comments that suggested rate-setters are worried about waiting too long in the face of pending economic stimulus from Washington. [nL2N1GD1UX]

* The comments sparked a flurry of selling in the bond market, with the two-year Treasury yield jumping to its highest level since December.

* Interest rate futures implied traders saw nearly a 57-percent chance the Fed would raise rates at its March 14-15 meeting, up from roughly 31 percent late on Monday, and around 20 percent a week ago, according to Reuters data.

* The U.S. economy expanded at a slower pace in the fourth quarter and appeared to remain on a moderate growth path as Trump took office with a promise to reinvigorate manufacturing and protect jobs. [nL2N1GC1C2]

* Sales of U.S. Mint American Eagle gold coins fell to a 14-month low while silver coin sales were also sharply lower in February, the latest government data showed on Tuesday, as bullion prices rose for the second straight month. [nL2N1GD1N8]

* INTL FCStone Ltd, a London-based subsidiary and precious metals division of INTL FCStone Inc , said this week that it was launching a web-based physical gold trading platform. [nL2N1GD0UY]

* Russia remained the world's third largest gold producer in 2016 behind China and Australia, data from its finance ministry showed on Tuesday. [nL5N1GD3LP]

DATA AHEAD (GMT)

0100 China Official manufacturing PMI Feb

0100 China Official non-manufacturing PMI Feb

0145 China Caixin manufacturing PMI final Feb

0850 France Markit manufacturing PMI Feb

0855 Germany Markit/BME manufacturing PMI Feb

0900 Germany Unemployment rate Feb

0900 Euro zone Markit manufacturing PMI final Feb

1300 Germany Consumer prices Feb

1330 U.S. Personal income Jan

1500 U.S. Construction spending Jan

1500 U.S. ISM manufacturing PMI Feb

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph Radford)