NEW YORK/LONDON (Reuters) - Gold prices were flat following a brief increase on Tuesday after the U.S. dollar backed down from a new 2018 high as worries hovered that the United States may be set to pull out of a key nuclear accord with Iran.
Spot gold was flat at $1,313.76 per ounce by 1:32 p.m. EDT (1732 GMT), while U.S. gold futures for June delivery settled down $0.40, or 0.03 percent, at $1,313.70 per ounce.
U.S. President Donald Trump is expected to announce at 2 p.m. EDT (1800 GMT) that he is pulling out of the Iran nuclear deal, European officials said, after they struggled to persuade him that the accord has halted Iran’s nuclear ambitions.
“If Trump pulls out, I reckon gold will pop higher, but I doubt it will stay elevated for too long,” said Forex.com’s Fawad Razaqzada.
The decisions to leave the accord should raise risk aversion in the broader markets, helping gold, seen as a safe asset that holds its value in times of geopolitical turmoil, though bullion is still pressured by a stronger dollar, in which it is priced.
“It must be the dollar which is providing the major influence on (gold’s) direction,” said Razaqzada. “However, gold has held its own relatively better than the euro in the dollar’s slipstream, suggesting that there is a degree or two of safe haven flows into the precious metal.”
Against a commodity basket, the greenback earlier surged to a 2018 high helped by safe haven flows linked to the Trump announcement on Iran and as expectations that other major central banks would follow the footsteps of the U.S. Federal Reserve in normalising monetary policy have been dashed.
India’s gold imports in April fell for a fourth straight month from a year ago to 57 tonnes, on subdued demand after local prices jumped to 21 month highs, provisional data from consultancy GFMS and bank dealers showed.
In 2018, gold will deliver its strongest annual price performance in five years, GFMS analysts forecast, as political uncertainty drives investment in bars and bullion-backed funds.
Spot gold may revisit its May 1 low of $1,301.51 per ounce as it twice failed to break resistance at $1,317, Reuters technical analyst Wang Tao said. 0
Silver rose 0.2 percent at $16.47 an ounce, earlier hitting close to a one-week low at $16.30. Platinum gained 0.5 percent at $912.20 per ounce.
Palladium fell 0.1 percent at $970.70 an ounce.
Additional reporting by Apeksha Nair in Bengaluru, editing by Jon Boyle, Richard Balmforth and Cynthia Osterman