Gold price slips but safe-haven demand provides support
London (April 19) Gold edged lower on Wednesday as the dollar gained, but escalating tension over North Korea and upcoming French and UK elections boosted investor demand in the safe-haven asset.
Spot gold was down 0.64% at $1,281.96/oz as of 9.32am GMT, but holding near a November high of $1,295.42 touched on Monday. US gold futures were 0.8% lower at $1,283.90.
US Vice-President Mike Pence said Washington would work with its allies and China to put economic and diplomatic pressure on North Korea but added the US would defeat any attack with an "overwhelming response".
"Today’s move is just a bit of a pause because we are still seeing pretty decent investor interest in gold," said ETF Securities analyst Martin Arnold.
"Investors are still using gold for insurance and defensive positioning because there are concerns over equity valuations and politics."
In France, investors remained nervous ahead of the first round of the country’s presidential election on Sunday, as a closely watched poll showed the first round of voting was too close to call, while pegging centrist Emmanuel Macron as the favourite to win overall.
British Prime Minister Theresa May’s call for a snap general election added to a lengthening list of uncertainties for investors already on edge over geopolitical tension.
"Political and geopolitical issues are for sure supportive elements at the moment," said Andrea Aratoli, head of trading at Argor-Heraeus.
Wing Fung Financial Group’s head of research Mark To said he expected gold prices to hover near $1,280, trading in a range between $1,270/oz-$1,310/oz.
MKS Pamp Group trader Sam Laughlin said gold should find support around $1,280 and $1,276, and was well positioned to test $1,300 as geopolitical concern underpinned its safe-haven status.
Spot silver dropped 0.6% to $18.14/oz. Platinum rose 0.4% to $976.90, while palladium was down 0.1% at $773.65 after touching a more than four-week low of $769.80 on Tuesday.
Source: Reuters
