May 10, 2017 / 9:49 AM / 4 months ago

PRECIOUS-Gold eases, holds above 8-week low as Trump dents risk appetite

    * Risk aversion ticks up after Trump fires FBI director
    * Gold turns lower as 10-year U.S. Treasury yield turns up

 (Updates prices; adds comment, second byline, NEW YORK
dateline)
    By Marcy Nicholson and Jan Harvey
    NEW YORK/LONDON, May 10 (Reuters) - Gold turned lower but
held above the previous day's eight-week low on Wednesday as
U.S. President Trump's abrupt firing of FBI chief James Comey
weighed on U.S. stocks, though gains were capped by expectations
of further interest rate increases.
    U.S. equities        paused and the dollar        eased as
risk appetite faded on concerns that Trump's dismissal of Comey
could make it harder for him to push through tax reform plans.
           
    Spot gold        was down 0.2 percent at $1,218.95 an ounce
by 1:47 p.m. EDT (1747 GMT), holding above Tuesday's two-month
low at $1,213.81 but turning lower as U.S. Treasury yields
            turned up.
    U.S. gold futures        for June delivery settled up 0.2
percent at $1,218.90.
    "(This) looks like an attempt at stabilization today after
the sharp losses in the preceding days," Commerzbank analyst
Carsten Fritsch said. "Trump's firing of FBI Chief Comey adds
new uncertainty, (and) stock markets seem to pause."
     Trump attributed his decision to sack Comey, who had been
leading an investigation into the Trump campaign's possible
collusion with Russia during the 2016 election, to the FBI
chief's handling of an investigation into presidential nominee
Hillary Clinton's emails.              
    Rival Democrats said that Trump had political motives for
the move.
    "The unpredictability of both Trump and North Korea has been
a reminder that geo-risk has not disappeared but temporarily
gone into hibernation," said Saxo Bank's head of commodity
research, Ole Hansen.             
    "Initially (the Comey sacking) has had only a limited impact
but it highlights that there are other drivers out there. It can
turn on a plate if one of the two escalates, especially North
Korea."
    Pressure remained on gold as expectations for further U.S.
monetary policy tightening next month underpinned the dollar and
weighed on bullion. 
    "Gold prices have dipped below the 100-day moving average,
implied volatility has eased towards 2005 lows and ...
strengthening U.S. Treasury yields are a strong downside risk
for gold prices," said Suki Cooper, precious metals analyst for
Standard Chartered Bank in New York.
    "We believe that physical demand should be more responsive
and limit the downside near term as the market is already
pricing in a June Fed rate hike."
    The metal is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding non-yielding
bullion while boosting the dollar, in which it is priced.
    Silver        was up 0.1 percent at $16.16 an ounce.
Platinum        was up 1 percent at $910.30 and palladium       
rose 0.4 percent to $798.98.

    
 (Additional reporting by Swati Verma in Bengaluru; Editing by
David Goodman and James Dalgleish)
  

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below