Gold up

Reuters

London

Gold hit its highest in 3-1/2 months on Friday as the dollar hit a one week low after the new US finance chief poured cold water on the "Trumpflation trade" that had boosted the greenback this year.

Treasury Secretary Steven Mnuchin said on Thursday that any steps US President Donald Trump's administration takes on policy would probably have only limited impact this year, though he wants to see tax reform passed by August.

The comments suggested much work was still needed on the sweeping tax plan that Mnuchin called his main priority, and which investors had bet would stoke growth and inflation this year.

"We've got a vacuum of (US domestic) policy, real (interest) rates going down, the dollar going sideways and geopolitical (jitters) around the world ...all helping gold," ICBC Standard Bank analyst Tom Kendall said. "There is apparently a move of institutional investor money into gold and there are usually very good reasons for that."