Gold price eases in French election afterglow; N.Korea woes limit losses

London (April 25)  Gold prices eased on Tuesday as investor sentiment remained skewed towards riskier assets in the wake of the French election results last weekend, though concerns over Korean peninsula limited the safe-haven's losses.

Spot gold was down 0.2 percent at $1,272.67 per ounce as of 0700 GMT. U.S. gold futures slipped 0.3 percent at $1,274.20.
Bullion prices fell about 0.7 percent in the previous session after touching $1,265.90 an ounce, the lowest since April 11, following the first round of France's presidential election that indicated less support for far-right candidate Marine LePen.

"People are going on the risk-on scenario (after French election results), but gold didn't really fall too far away," said Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo.

"There are more people who are still worried about not only
France but other European countries, Trump policies and North
Korean worries... investors prefer to hold gold rather than sell
it off."
    Bullion is often seen as an alternative investment during
times of political and financial uncertainty.
    "Traders remained cautious through the day with North Korea
celebrating military foundation day (85 years of militarised N.
Korea), with a very real prospect of possible provocation to
demonstrate their military prowess," said MKS PAMP Group trader
Alex Thorndike.
    North Korea conducted a big live-fire exercise on Tuesday to
mark the foundation of its military, media reported, as a U.S.
submarine docked in South Korea in a show of force amid growing
concern over Pyongyang's nuclear and missile programmes.
           
    Holdings of SPDR Gold, the world's largest gold-backed
exchange-traded fund, rose 0.17 percent to 860.17 tonnes on
Monday. Holdings have risen 6 tonnes in the past two sessions,
indicating investor's interest in the safe-haven asset.
    On the technical front, gold, however, does not have a rosy
picture with the potential of a decent downside correction if
and when uncertainty fades, said Jeffrey Halley, senior market
analyst at OANDA.
    "Gold has resistance at $1,290 and then $1,296, having
failed in this area numerous times last week. Below, support
lies at $1,265.50 and then the 200-day average at $1,254.80. A
daily close below $1,240 would signal a much larger correction
could be on the way."
    Goldman Sachs, in a note on Monday, said it continues to
expect gold to come under pressure in the near term on a
potential rally in real interest rates following the expected
unveiling of President Trump's tax policies on Wednesday or
later.                         
    Silver dipped 0.2 percent to $17.87 an ounce, after
touching a one-month low of $17.65 in the previous session.
    Platinum  was down 0.1 percent at $957.80 an ounce,
after falling over 1 percent in the prior session.
    Palladium fell 0.3 percent to $793.05 an ounce.

Source: Reuters