* Asian stocks post biggest daily rise in a month
* Worries over Trump support safe-haven appetite for gold
* Spot gold to retrace to $1,245 - technicals
* Silver hits three-week high
(Updates prices, adds quotes)
By Vijaykumar Vedala
May 22 Gold prices held steady on Monday,
holding on to the gains from the previous session, as political
turmoil surrounding U.S. President Donald Trump helped boost the
yellow metal's safe-haven appeal.
Trump was hit on Friday by embarrassing leaks that a senior
adviser was a "person of interest" in a probe of possible
collusion with Russia during last year's election campaign and
that Trump had boasted to Russian officials of firing the man
heading the investigation.
Secretary of State Rex Tillerson and National Security
Adviser H.R. McMaster defended Trump saying the president had
raised the firing of the FBI director James Comey, in a meeting
with Russia's foreign minister to explain why he had been unable
to find areas of cooperation with Moscow.
"We would advocate abandoning our recent sidelined stance
and would buy gold on any significant setback (i.e. a
$10-$15/ounce decline from current levels) as markets
increasingly coalesced around the notion of continued paralysis
in Washington," INTL FCStone analyst Edward Meir said in a note.
Spot gold was nearly unchanged at $1,254.75 per
ounce, as of 0755 GMT, after edging down earlier in the session.
U.S. gold futures were up 0.1 percent at $1,254.70
Some of the weekend risk hedging was unwound in early Asia
trading, said Jeffrey Halley, senior market analyst at OANDA.
In the wider markets, Asian stocks posted their biggest
daily rise in a month on Monday following modest gains in U.S.
The dollar inched higher but held close to six-month lows
against a basket of currencies as investors assessed the impact
of the political turmoil in the United States.
"The outlook on gold remains relatively hazy at this
juncture, given ongoing geopolitical concerns amid a likely
rate-hike into the next month," OCBC analyst Barnabas Gan said
in a note.
"Fundamentally, we remain bearish on the yellow metal,
underpinned by two more rate hikes by the U.S. central bank in
Higher interest rates tend to boost the dollar and push bond
yields up, putting pressure on gold prices by increasing the
opportunity cost of holding non-yielding bullion.
Spot gold is expected to retrace to support at $1,245 per
ounce, as it failed to break resistance at $1,257, said Reuters
technical analyst Wang Tao.
Hedge funds and other money managers cut their net long
position in COMEX gold for the third week in the week ended May
16, taking it to a two-month low, U.S. Commodity Futures Trading
Commission (CFTC) data showed.
Meanwhile, silver climbed 0.8 percent to $16.96 an
ounce. Early in the day, it touched $17.13 an ounce, its highest
since May 1.
Platinum slipped 0.4 percent to $934.49 an ounce,
while palladium gained 0.1 percent to $760.25.
(Reporting by Vijaykumar Vedala in Bengaluru; Editing by Joseph
Radford and Sherry Jacob-Phillips)