PRECIOUS-Gold holds near 3-1/2 month highs; Trump economic policy in focus

Last Updated: Mon, Feb 27, 2017 06:20 hrs

Feb 27 (Reuters) - Gold prices held firm on Monday near 3-1/2-month highs hit in the previous session as investors await more clarity on President Donald Trump's economic policy. FUNDAMENTALS * Spot gold was little changed at $1,256.61 per ounce at 0034 GMT. The metal hit its highest since Nov. 11 at $1,260.10 in the previous session. * U.S. gold futures were also steady at $1,257.70. * Investors are looking towards U.S. President Donald Trump's policy speech to a joint session of Congress on Tuesday night where he is expected to provide clues on his plans to cut taxes. * New U.S. single-family home sales rose less than expected in January, likely held back by heavy rains and flooding in California, but continued to point to a strengthening housing market despite higher prices and mortgage rates. * Worldwide sovereign debt is set to reach a new record high of $44 trillion this year despite a slight reduction in governments' annual borrowings, an estimate from credit ratings agency S&P Global said on Friday. * Hedge funds and money managers raised their net long position in COMEX gold to the highest in nearly three months during the week to Feb. 21. Speculators raised their net long position in bullion by 14,482 to 82,464 lots. * Gold demand in Asia remained sluggish this week as a price rally on political concerns and dollar weakness kept buyers on the sidelines. * The rise in world stocks last week to fresh all-time highs drew an eighth straight weekly inflow into equity funds, Bank of America Merrill Lynch said on Friday, while bond funds also chalked up their ninth straight weekly inflow. * Greece's central bank governor warned on Friday that "uncertainty" could hobble the country's economic recovery if the government and its lenders do not conclude a bailout review soon. * Australian gold output hit a 17-year high of 298 tonnes in 2016 as higher bullion prices drove mining companies to dig deeper, a sector survey released on Sunday showed. * Greece's central bank said on Saturday it held 149.1 tonnes of gold reserves at the end of December worth 5.26 billion euros ($5.55 billion), with about half kept in its vaults and the rest stored abroad. * Holdings of the largest gold-backed exchange-traded fund, New York's SPDR Gold Trust , have risen more than 5 percent this month on geopolitical risk. DATA AHEAD (GMT) 1000 Euro zone Business climate Feb 1000 Euro zone Consumer confidence final Feb 1330 U.S. Durable goods Jan 1500 U.S. Pending homes sales Jan (Reporting By Nallur Sethuraman in Bengaluru; Editing by Richard Pullin)