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PRECIOUS-Gold steadies after hitting 5-month peak as political tensions simmer
April 12, 2017 / 7:00 PM / 8 months ago

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

    * SPDR Gold holdings rise by about 6 tonnes this week

 (Adds comments, latest market movement, updates prices; adds
NEW YORK dateline)
    By Devika  Krishna Kumar and Maytaal Angel
    NEW YORK/LONDON, April 12 (Reuters) - Gold steadied on
Wednesday after hitting a five-month peak as  the dollar
reversed losses and political tensions simmered, leaving
investor interest in safe havens like the precious metal largely
    Tarnishing an otherwise brightening outlook for global
growth, tensions continued over the Korean peninsula and the
Middle East, while worries about the upcoming French
presidential election persisted.
    "Gold finally came up to the $1,275 area we looked for as
bullish technicals, political worries ... (added to) benign
interest rates, Fed caution in raising rates and other world
tensions especially Middle East and North Korea," said George
Gero, managing director at RBC Wealth Management.
    Spot gold        was mostly unchanged at $1,274.8 per ounce
by 2:33 p.m. EDT (1833 GMT). It hit its strongest since Nov. 10
at $1,279.80 earlier, extending the previous session's near 2
percent gains.   
    U.S. gold futures         rose 0.3 percent to settle at
    "We see short term downside for gold at $1276/oz with our
3/6/12-month price targets $1200/1200/1250/oz," Goldman Sachs
said in a note.
    "Although it is possible that further unwinding of the Trump
related equity trades or escalation in heightened geopolitical
tensions pushes gold even higher in the next several weeks, we
think that over the next three months improvement in U.S. hard
growth data and subsequent increase in real rates would bring
gold prices down."
    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 that has
prompted investors to sell the greenback 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 towards the western Pacific.              
    Elsewhere, Vladimir Putin said trust had eroded between the
United States and Russia, as Moscow delivered an unusually
hostile reception to U.S. Secretary of State Rex Tillerson in a
face-off over Syria.             
    In France's presidential race, centrist Emmanuel Macron and
far-right leader Marine Le Pen clung on as frontrunners, but a
far-left veteran has surged into the top four, pushing some
pollsters to calculate the most extreme run-off scenarios.
    Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, rose 0.50 percent to 842.41
tonnes on Tuesday. The ETF has seen about six tonnes of inflows
this week.
    Spot silver        was 0.2 percent lower at $18.27 an ounce.
    Platinum        fell 0.6 percent to $962 after rising over 3
percent in the previous session, while palladium        dropped
0.8 percent to $795.25.

 (Additioanl reporting by Nallur Sethuraman in Bengaluru;
Editing by David Evans and Chizu Nomiyama)

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