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PRECIOUS-Gold edges down on profit-taking, but geopolitical worries support
April 19, 2017 / 3:55 AM / 5 months ago

PRECIOUS-Gold edges down on profit-taking, but geopolitical worries support

    * Worries about North Korea, French election lend support to
gold
    * Dollar recovers slightly from 3-week low hit on Tuesday

 (Adds quote, updates prices)
    By Sethuraman N R
    April 19 (Reuters) - Gold slipped on Wednesday on mild
profit-taking, but geopolitical concerns about North Korea and
nervousness ahead of the French presidential election lent
support to the safe-haven asset.
    Spot gold        was down 0.4 percent at $1,284.15 per ounce
as of 0617 GMT. 
    U.S. gold futures         were 0.6 percent lower at
$1,288.80.
    U.S. Vice President Mike Pence said on Wednesday that
Washington would work with its allies and China to put economic
and diplomatic pressure on North Korea but added that America
would defeat any attack with an "overwhelming     response."
            
    "The whole situation for gold is more than optimistic
because of the geopolitical tensions aroused by North Korea and
with the interest rate hike expectations coming down," said Mark
To, head of research at Hong Kong's Wing Fung Financial Group.
    "We see $1,280 as the gravity around which the trading range
will be built and prices will move between $1,270-$1,310."
    The dollar index        edged up, but was hovering near a
three-week low on disappointing U.S. housing starts data and
nervousness over trade talks between the United States and
Japan.                    
    "Gold has been stuck at a high level and seeing a bit of
profit-taking... Prices should adjust and rise again," said a
Shanghai-based trader.
    In France, investors remained nervous ahead of the first
round of the country's presidential election this Sunday, even
though an opinion poll put centrist Emmanuel Macron first, just
ahead of far-right, anti-euro candidate Marine Le Pen.
            
    "Nervousness heading into the French election should
theoretically provide some support to gold, but at some point,
we think the markets will start to discount a poor showing for
Le Pen and perhaps siphon off some of the risk premium already
baked into prices," said INTL FCStone analyst Edward Meir.
    "However, offsetting this somewhat, is the possibility that
the dollar will continue to recede on a Le Pen defeat, coupled
with the fact that U.S. tax reform and infrastructure spending
both seem to be increasingly far removed, painting a rather
bullish backdrop for gold."
    British Prime Minister Theresa May's call for a snap general
election added to a lengthening list of uncertainties for
investors already on edge over geopolitical tensions.
            
    Gold should find support around $1,280 and $1,276 to
restrict further downside moves in the short term, while the
metal is well positioned to test $1,300 levels as geopolitical
concerns underpin its safe-haven status, said MKS PAMP Group
trader Sam Laughlin.
    Spot silver        dropped 0.4 percent to $18.18 per ounce.
    Platinum        rose 0.3 percent to $976, while palladium
       was down 0.3 percent at $772.55. Palladium on Tuesday
fell nearly 2 percent to a more than four-week low of $769.80.

 (Reporting By Nallur Sethuraman in Bengaluru; Editing by
Subhranshu Sahu)
  

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