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PRECIOUS-Gold slips from near 7-month high after written testimony of ex-FBI head
June 7, 2017 / 8:20 PM / 3 months ago

PRECIOUS-Gold slips from near 7-month high after written testimony of ex-FBI head

    * Ex-FBI head Comey says Trump pressured him on Russia probe
    * UK and U.S. political uncertainty dominates sentiment
    * Market looking ahead to U.S. Fed meeting

 (Adds comments, update prices, latest news on Comey )
    By Devika  Krishna Kumar and Pratima Desai
    NEW YORK/LONDON, June 7 (Reuters) - Gold prices fell from
near seven-month highs on a stronger dollar and after a written
testimony by a former FBI director to the U.S. Senate was seen
as containing few surprises, but declines were limited as
uncertainty from the UK election remained.
    Former Federal Bureau of Investigation Director James Comey
said U.S. President Donald Trump asked him to drop a probe of
former national security adviser Michael Flynn as part of an
investigation into whether Russia meddled in the 2016 election,
according to testimony from Comey posted on the Senate
Intelligence Committee's website.             
    "Gold trading near lows of the session as Comey's written
remarks confirm he told the president more than once that he was
not personally under investigation and contain no hints of what
could be obviously considered obstruction," said Tai Wong,
director of base and precious metals trading for BMO Capital
Markets in New York.
    "The Q&A will be a circus and can't rule out something juicy
but so far those hoping for a smoking gun may have instead found
a child's water pistol." 
    Bullion also came under some pressure after the dollar index
      , which tracks the greenback against six major rivals, 
rose about 0.1 percent.       
    A rising U.S. currency makes dollar-denominated gold more
expensive for holders of other currencies, potentially subduing
demand.       
    Spot gold        was down 0.6 percent at $1,285.17 an ounce
by 3:34 p.m. EDT (1934 GMT). On Tuesday, it gained 1.1 percent
to its highest since November last year at $1,295.97. U.S. gold
futures         slipped to settle at $1,293.2.
    Dealers said comments late in the session from the head of
U.S. Missile Defense Agency saying North Korea ballistic missile
advances in the past six months have caused him "great concern"
triggered modest buying in gold.             
    "As such, I expect the price of gold will continue to head
higher, as a two-step forward, one-step back improvement in the
price. I believe the next level of resistance is the $1,295
range," said Walter Pehowich, executive vice president of
investment services at Dillon Gage Metals.
    "If we can trade through that level, I expect an obvious
speed bump at the $1,300 dollar level." 
    In Britain, markets are worried the ruling Conservative
party might not get a majority in Thursday's elections. Prime
Minister Theresa May wants to increase her majority to
strengthen Britain's hand in exit talks with the European Union.
    Traders are also looking ahead to a meeting of the U.S.
Federal Reserve next week.
    "We do expect gold to hit some turbulence as we approach the
June Fed rate hike, but things could open up for the precious
metal post-meeting if the central bank's language remains 
dovish," said INTL FCStone analyst Edward Meir.
    Among other precious metals, platinum        fell 1.2
percent to $944.90 an ounce and palladium        slid 2.3
percent to $833.90 after earlier touching $859.80 an ounce, its
highest since September 2014.
    Platinum is used mainly to make autocatalysts for
diesel-fueled cars, while palladium is mainly used for
autocatalysts in gasoline-fueled cars.
    "(Palladium has) a much broader exposure to global car
markets. According to data from the United States, Europe and
Japan, the recent slowdown in sales continued also in May,"
Julius Baer analysts said in a note.
    "We stick to our negative view (on palladium) and
short-position, expecting prices to realign with the weaker
demand backdrop over the coming months."
    Silver        was down 0.5 percent at $17.57 an ounce.

 (Additional reporting by Vijaykumar Vedala and Koustav Samanta;
editing by Louise Heavens and Steve Orlofsky)
  

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