May 9, 2018 / 10:10 AM / 18 days ago

PRECIOUS-Gold slips; Trump Iran move fails to spark safe-haven buying

    * Dollar eases off 2018 peak after U.S. data
    * Rising U.S. Treasury yields also pressure gold
    * Spot gold may revisit May 1 low $1,301.51/oz -technicals

 (New throughout, updates prices, market activity and comments;
adds second byline and NEW YORK dateline)
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, May 9 (Reuters) - Gold prices dipped on
Wednesday as safe-haven buying failed to kick in after the
United States withdrew from the Iranian nuclear accord, and as
rising U.S. Treasury yields added pressure.
    Dismayed European allies sought to salvage the international
nuclear pact with Iran after U.S. President Donald Trump pulled
Washington out of the landmark accord, reached in 2015 before he
took office.             
    "The fact that the cat is out of the bag and we have the
announcement (on Iran) - that has removed some of the
geopolitical support for gold," said Ole Hansen, head of
commodity strategy at Saxo Bank in Copenhagen.
    Gold prices often rise during times of political turmoil, as
bullion is widely considered a safe-haven asset alongside the
dollar and the Japanese yen.
    Also weighing on gold, geopolitical tensions in the Korean
peninsula eased further as North Korea freed three American
detainees ahead of talks between Trump and North Korea leader
Kim Jong Un.              
    Spot gold        lost 0.1 percent at $1,312.89 an ounce by
1:33 p.m. EDT (1733 GMT), after touching a one-week low of
$1,304.11. 
    U.S. gold futures         for June delivery settled down 70
cents, or 0.05 percent, at $1,313 per ounce. 
    The dollar index        rose to a 2018 peak, then went into
negative territory after U.S. producer prices rose less than
expected.                    
    Yields on the benchmark 10-year Treasury note            
breached 3 percent. A series of U.S. bond auctions this week
could boost yields further, which could pressure gold enough to
challenge the $1,300 support area, Hansen added.
    The prospect of more U.S. interest rate increases will also
weigh on gold, Standard Chartered analyst Suki Cooper said.
    "We continue to expect prices to test the downside in the
lead-up to the June FOMC meeting as the market re-prices the Fed
hiking trajectory," she said in a note.  
    Spot gold may revisit its May 1 low of $1,301.51 per ounce
as it failed three times to break resistance at $1,317, said
Reuters technical analyst Wang Tao.              
    However, a four-year high in oil prices may stoke inflation.
              
    "If we start to see any sign that inflation will spike,
that'll drive gold higher," said Chris Gaffney, president of
world markets at EverBank. 
    Silver        rose 0.6 percent at $16.53 an ounce. During
the session it reached $16.62, a two-week high. 
    Platinum        rose 0.8 percent to $912.74 an ounce.
Palladium        added 0.6 percent to $975.50. It hit $982.60,
close to a two-week high.

 (Reporting by Renita D. Young and Eric Onstad; Editing by David
Gregorio and Mark Heinrich)
  
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