Gold steady on geopolitical worries amid firmer dollar

20 April, 2017, 11:13 | Author: Leticia Walters
  • Asia stocks, dollar under pressure after soft US data

Gold fell 1 per cent on Wednesday as the dollar and stocks gained, though tensions over North Korea and upcoming French and United Kingdom elections underpinned demand in the safe-haven asset.

Market watchers said the U.S.' bombing of Syria and Afghanistan, as well as the possibility of North Korea conducting another nuclear test, is causing many investors to become anxious, and this is pushing up gold prices.

The precious metal extended gains into the fourth consecutive session Monday, as worries.

The yellow metal gave up some gains as the U.S. dollar rebounded against the yen from a five-month low of 108.11 hit earlier in the day.

Spot gold was mostly unchanged at $1,278.64 per ounce at 0346 GMT.

US stocks regained some ground after the recent global risks had weighed on the market last week.

"Nervousness heading into the French election should theoretically provide some support to gold, but at some point, we think the markets will start to discount a poor showing for Le Pen and perhaps siphon off some of the risk premium already baked into prices", said INTL FCStone analyst Edward Meir.

Investors remained nervous ahead of France's first round of the country's presidential election on Sunday, as a closely watched poll showed the first round of voting is too close to call, though does give centrist Emmanuel Macron the edge to win overall. Visit MarketWatch.com for more information on this news.

Uncertainties over Mr Trump's policy towards North Korea have been growing since the US Navy fired 59 Tomahawk missiles at a Syrian airfield on April 6.

Sales of 1-kilogram gold bars, sold at 54.46 million won, soared 2.5 times to 50 per day from the previous week. "We expect any dips in prices to be eagerly sought by traders", said Jeffrey Halley, a senior market analyst at OANDA.

The Bloomberg Dollar Spot index fell 0.4 percent and has sunk about 4.8 percent from a high reached in January.

Platinum rose 0.3 percent to $982.50 per ounce, while palladium dropped 0.3 percent to $785.95.

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