* Worries about North Korea, French election limit losses
* Dollar recovers from 3-week low hit on Tuesday
(Updates prices; adds comment, second byline, NEW YORK
By Marcy Nicholson and Zandi Shabalala
NEW YORK/LONDON, April 19 Gold fell 1 percent on
Wednesday as the dollar and stocks gained, though tensions over
North Korea and upcoming French and UK elections underpinned
demand in the safe-haven asset.
Spot gold fell as low as $1,275.73 per ounce, and was
last trading down 0.8 percent at $1,279.54 by 3:24 p.m. EDT
U.S. gold futures settled down 0.8 percent at
"The 10-year Treasury yield at 2.2 percent is in positive
territory ... keeping some pressure on the price of gold," said
Walter Pehowich, executive vice president in charge of precious
metals investments services for Dillon Gage Metals.
"It appears that large fund selling in the Far East
overnight is also putting pressure on the price of gold, and
this move has kept the Wall Street gold traders guarding their
The firm U.S. dollar also pressured gold prices,
A stronger greenback makes dollar-denominated assets such as
gold more expensive for holders of other currencies.
A run of disappointing U.S. economic data and doubts the
Trump administration will progress with tax cuts have quelled
expectations of faster inflation, while the Federal Reserve said
in its Beige Book that the U.S. economy expanded at a
modest-to-moderate pace between mid-February and the end of
While declines in energy shares weighed on U.S. stocks,
gold's losses were capped by uncertainties over elections and
U.S. Vice President Mike Pence said Washington would work
with its allies and China to put economic and diplomatic
pressure on North Korea.
"Investors are still using gold for insurance and defensive
positioning because there are concerns over equity valuations
and politics," said ETF Securities analyst Martin Arnold.
In France, investors remained nervous ahead of the first
round of the presidential election on Sunday. A closely watched
poll showed the first round of voting was too close to call,
although centrist Emmanuel Macron remained favorite to win.
"Everyone is following the French election closely this
weekend, as the outcome may have a significant impact on the
price of gold in the coming months," Pehowich said.
"If Marine Le Pen gets into a runoff, which appears likely,
she could win and initiate France’s exit from the EU."
British Prime Minister Theresa May's call for a snap general
election added to a list of uncertainties for investors.
Spot silver dropped 0.6 percent to $18.14 per ounce.
Platinum fell 1.1 percent to $962.99, while palladium
was up 0.2 percent at $776.
(Additional reporting By Nallur Sethuraman in Bengaluru;
Editing by Elaine Hardcastle and Meredith Mazzilli)