April 26, 2017 / 3:57 AM / 3 months ago

PRECIOUS-Gold slips to two-week low on improved risk appetite; equities rally

3 Min Read

    * Spot gold may fall to $1,249/oz - technicals
    * SPDR Gold holdings drop 0.69 percent on Tuesday
    * Silver hits over one-month lows

 (Updates prices)
    By Sethuraman N R
    April 26 (Reuters) - Gold fell to a two-week low on
Wednesday as investors opted for riskier assets such as equities
on renewed optimism over the U.S. economy and as political
uncertainty in France receded, softening demand for safe-haven
assets. 
    Spot gold        was mostly unchanged at $1,263.53 at 0741
GMT. Earlier in the session, prices hit a low of 1,260.90, their
lowest since April 11. 
    U.S. gold futures         were down 0.2 percent at $1,264.90
an ounce.
    Asian stocks extended gains for a fifth straight day on
Wednesday after Wall Street hit new peaks.            
            
    "Over the past two sessions, the momentum for gold to move
ahead has actually faded away. We can see that risk appetite has
increased after the easing situation in North Korea and French
election results," said Mark To, head of research at Hong Kong's
Wing Fung Financial Group.
    "We have to move back to the original gravity of trading
range of $1,200-$1,250."
    U.S. President Donald Trump is proposing to slash the
corporate income tax rate and offer multinational businesses a
steep tax break on overseas profits brought into the United
States, officials said late on Tuesday.             
    "For gold investors this may not be good news as the overall
situation for the Trump administration is to ensure that there
is sufficient capital inflows to asset markets including
equities or dollar to finance fiscal deficit," said To.
    "They have to balance it by keeping the original momentum by
rising rates and use fiscal policies to attract more and more
people to the U.S. stock markets, which will be negative for
gold."
    The threat of a U.S. government shutdown this weekend
appeared to recede on Tuesday after President Donald Trump
backed away from a demand that Congress include funding for his
planned border wall with Mexico in a spending bill.             
    Political concerns in France ebbed after business-friendly
centrist Emmanuel Macron won the first round of the French vote
on Sunday and opinion polls indicated less support for the
eurosceptic Marine Le Pen.             
    Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, fell 0.69 percent to 854.25
tonnes on Tuesday after 6 tonnes of inflows.         
   Spot gold is expected to fall to $1,249 per ounce, as it has
broken a support at $1,265, according to Reuters technical
analyst Wang Tao.             
    Spot silver        dropped 0.2 percent to $17.51 an ounce,
after hitting over one-month low of $17.49.
    Platinum        climbed 0.3 percent to $952.60 an ounce,
while palladium        fell 0.2 percent to $798.83.

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

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