April 25, 2017 / 4:25 AM / 4 months ago

PRECIOUS-Gold eases in French election afterglow; N.Korea woes limit losses

    * Spot gold down for a second day
    * SPDR Gold holdings up 6 tonnes in last two sessions
    * Silver off one-month lows hit on Monday

 (Adds comments, updates prices)
    By Swati Verma
    BENGALURU, April 25 (Reuters) - Gold prices eased on Tuesday
as investor sentiment remained skewed towards riskier assets in
the wake of the French election results last weekend, though
concerns over Korean peninsula limited the safe-haven's losses.
    Spot gold        was down 0.2 percent at $1,272.67 per ounce
as of 0700 GMT. 
    U.S. gold futures         slipped 0.3 percent at $1,274.20.
    Bullion prices fell about 0.7 percent in the previous
session after touching $1,265.90 an ounce, the lowest since
April 11, following the first round of France's presidential
election that indicated less support for far-right candidate
Marine LePen.
    "People are going on the risk-on scenario (after French
election results), but gold didn't really fall too far away,"
said Yuichi Ikemizu, head of commodity trading at Standard Bank
in Tokyo. 
    "There are more people who are still worried about not only
France but other European countries, Trump policies and North
Korean worries... investors prefer to hold gold rather than sell
it off."
    Bullion is often seen as an alternative investment during
times of political and financial uncertainty.
    "Traders remained cautious through the day with North Korea
celebrating military foundation day (85 years of militarised N.
Korea), with a very real prospect of possible provocation to
demonstrate their military prowess," said MKS PAMP Group trader
Alex Thorndike.
    North Korea conducted a big live-fire exercise on Tuesday to
mark the foundation of its military, media reported, as a U.S.
submarine docked in South Korea in a show of force amid growing
concern over Pyongyang's nuclear and missile programmes. 
            
    Holdings of SPDR Gold, the world's largest gold-backed
exchange-traded fund, rose 0.17 percent to 860.17 tonnes on
Monday. Holdings have risen 6 tonnes in the past two sessions,
indicating investor's interest in the safe-haven asset.
    On the technical front, gold, however, does not have a rosy
picture with the potential of a decent downside correction if
and when uncertainty fades, said Jeffrey Halley, senior market
analyst at OANDA.
    "Gold has resistance at $1,290 and then $1,296, having
failed in this area numerous times last week. Below, support
lies at $1,265.50 and then the 200-day average at $1,254.80. A
daily close below $1,240 would signal a much larger correction
could be on the way."
    Goldman Sachs, in a note on Monday, said it continues to
expect gold to come under pressure in the near term on a
potential rally in real interest rates following the expected
unveiling of President Trump's tax policies on Wednesday or
later.                          
    Silver        dipped 0.2 percent to $17.87 an ounce, after
touching a one-month low of $17.65 in the previous session.
    Platinum        was down 0.1 percent at $957.80 an ounce,
after falling over 1 percent in the prior session.
    Palladium        fell 0.3 percent to $793.05 an ounce.

 (Reporting by Swati Verma and Nallur Sethuraman in Bengaluru;
Editing by Christian Schmollinger and Sherry Jacob-Phillips)
  

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