* Stocks, U.S. dollar and bond yields rise
* Investors look to U.S. rate rise in June
* Spot silver falls to four-month low
(Updates prices; adds comment, byline, NEW YORK dateline)
By Marcy Nicholson and Peter Hobson
NEW YORK/LONDON, May 9 Gold dropped to an
eight-week low on Tuesday as safe-haven demand continued to fade
in the wake of Emmanuel Macron's victory in the French election
and as expectations for tighter U.S. monetary policy lifted bond
Revived appetite for riskier assets also pushed global
stocks to record highs, while the U.S. dollar index
Rising stocks and higher bond yields raise the opportunity
cost of holding non-yielding bullion, while a stronger dollar
makes gold more expensive for holders of other currencies.
The spot gold price was down 0.8 percent at $1,215.81
an ounce by 2:19 p.m. EDT (1819 GMT), after falling below its
100-day moving average to $1,214.39, the lowest since March 15.
U.S. gold futures settled down 0.9 percent at
"With one of the largest political risk events now cleared,
some consolidation is warranted, albeit political uncertainty
lingers in Italy and is likely to remain for some time," UBS
analyst Joni Teves said.
"Further pressure cannot be ruled out for now but we expect
bargain hunting to emerge and physical buying to strengthen
should the market test $1,200, paving the way for a recovery."
Investors were looking ahead to U.S. interest rate rises
that would pressure gold as they tend to push up bond yields and
strengthen the dollar.
Boston Federal Reserve President Eric Rosengren said the
fall of U.S. unemployment below its natural equilibrium could
prompt faster interest-rate hikes if it were to drop below 4
percent. Kansas City Fed President Esther George said the
falling jobless rate means that adjusting monetary policy is of
U.S. bond yields hit a five-week high and the dollar
strengthened as interest rate futures implied traders saw an 88
percent chance the Fed would raise rates by a quarter point at a
meeting in June, CME Group's FedWatch program showed.
"With the Fed likely continuing to signal more hikes,
speculative investors who hold an outsized amount of net long
positions could well be tempted to unload and take profits,"
said TD Securities in a note late Monday.
"But since the U.S. central bank is not going to be overly
aggressive in how it removes monetary accommodation, equity
market correction risk and concerns the U.S. central bank may
eventually fall behind the inflation curve, should provide
support for the yellow metal."
In other precious metals, silver was down 1 percent
at $16.07 an ounce, after falling to $16.01, the lowest since
Platinum was 1.9 percent lower at $898.98 and
palladium was down 1.6 percent at $794.40 an ounce.
(Additional reporting by Swati Verma in Bengaluru; editing by