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PRECIOUS-Gold steadies after hitting 5-mth peak as political tensions simmer
April 12, 2017 / 10:59 AM / 4 months ago

PRECIOUS-Gold steadies after hitting 5-mth peak as political tensions simmer

    * Pause in geopolitical tensions takes gold off peaks
    * Mood remains skittish, giving gold further upside
    * SPDR Gold holdings rise by about 6 tonnes this week

 (Recasts, updates prices, adds graphic)
    By Maytaal Angel
    April 12 (Reuters) - Gold steadied on Wednesday after
hitting a five-month peak as a respite in disquieting political
news took the edge off investors' appetite for safe havens even
as the mood remained edgy. 
    Tarnishing an otherwise brightening outlook for global
growth, tensions continued to boil in the Korean peninsula and
the Middle East, while the upcoming French presidential election
also worried investors.   
    Spot gold        was mostly unchanged at $1,273.51 per ounce
by 1016 GMT. It hit its strongest since Nov. 10 at $1,279.80,
extending the previous session's near 2 percent gains.   
    U.S. gold futures         rose 0.1 percent to $1,275.60.
    "The short term geopolitical impact will likely fade but
(gold) was oversold on expectations of rate hikes and the
reality of muted rate hikes sets up the potential for (further)
upside," said Hamza Khan, head of commodities strategy at ING.
    Gold tends to gain when rate hike expectations recede
because lower rates reduce the opportunity cost of holding
non-yielding bullion. 
    The dollar        was flat versus a currency basket after
falling on Tuesday, though a general risk-off mood prevailed. 
      
    Chinese President Xi Jinping on Wednesday stressed the need
for a peaceful solution for the Korean peninsula on a call with
U.S President Donald Trump.
    On Tuesday North Korea warned of a nuclear attack on the
United States at any sign of American aggression, as a U.S. Navy
strike group steamed toward the western Pacific.              
    Meanwhile, the United States accused Russia on Tuesday of
trying to shield Syria's leader from blame for a deadly poison
gas attack last week.             
    In France's presidential race, centrist Emmanuel Macron and
far-right leader Marine Le Pen have clung on as frontrunners,
but a far-left veteran has now surged into the top four, pushing
some pollsters to calculate the most extreme run-off scenarios.
            
    Gold could resume its rise ahead of the Easter long-weekend,
Jeffrey Halley, senior market analyst at OANDA, said.
    "Gold has finally broken and closed above its 200-day moving
average at $1,257.50, which now becomes a support. From a
technical perspective, the way is now clear for a run at $1,300
and possibly higher," Halley said.
   "The safe-haven effect is clearly in play once again ahead of
the Easter holiday with volumes in both spot and options well
above average," he said.
    Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund (ETF), rose 0.50 percent to
842.41 tonnes on Tuesday. The ETF has seen about six tonnes of
inflows this week.
    Spot silver        dipped 0.1 percent to $18.30 an ounce.
    Platinum        fell 0.7 percent to $960.50 per ounce after
rising over 3 percent in the previous session, while palladium
       dropped 0.9 percent to $794.03.

    
 (Additioanl reporting by Nallur Sethuraman in Bengaluru;
editing by Susan Thomas)
  

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