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PRECIOUS-Gold turns lower after biggest rally since Brexit vote
May 18, 2017 / 11:27 AM / 7 months ago

PRECIOUS-Gold turns lower after biggest rally since Brexit vote

    * Gold hits highest since May 1 at $1,265.04/oz
    * Dollar bounces up after U.S. economic data
    * Spot palladium falls to two-month low
    * GRAPHIC-2017 asset returns:

 (Recasts; updates prices; adds comment, byline, NEW YORK
    By Marcy Nicholson and Jan Harvey
    NEW YORK/LONDON, May 18 (Reuters) - Gold fell on Thursday as
a bounce in the dollar prompted some buyers to cash in gains
after its biggest one-day rally in nearly a year, though
uncertainty over the outlook for the Trump presidency
underpinned the metal near two-week highs.
    Gold surged nearly 2 percent on Wednesday, its biggest
one-day jump since Britain's June vote to leave the European
Union, on reports that U.S. President Donald Trump had tried to
intervene in an investigation into alleged Russian interference
in last year's U.S. election.            
    "Late longs from yesterday are getting punished as bullion
drops to $1,247, with stocks and dollar regaining a little
traction amid increasing realization that the drama in
Washington could take many months to play out," said Tai Wong,
director of base and precious metals trading for BMO Capital
Markets in New York.
    Spot gold        was down 1.1 percent at $1,246.92 an ounce
by 2:32 p.m. EDT (1832 GMT), having touched its highest since
May 1 at $1,265.04. It fell to a session low of $1,245.40,
around the 200-day moving average, after five straight sessions
    U.S. gold futures        for June delivery settled down 0.5
percent at $1,252.80.
    The U.S. dollar index        rebounded from Wednesday's
currency six-month low after stronger-than-expected U.S.
economic data.       
    "(Gold) is seeing a pullback after yesterday's strong
performance - it needs to take a breather," said Heraeus
precious metals trader Alexander Zumpfe. "It ran into resistance
towards $1,260."
    Nonetheless, sentiment has turned more positive and
technical indicators are looking promising, he added.
    The latest reports on Trump came after a turbulent week in
which he fired FBI Director James Comey and discussed sensitive
national security information with Russia's foreign minister,
causing investors to question whether he can deliver on pledged
tax cuts and deregulation.                          
    Current and former U.S. officials familiar with the
exchanges told Reuters on Thursday that Michael Flynn and other
advisers to the Trump campaign were in contact with Russian
officials and others with Kremlin ties in at least 18 calls and
emails during the last seven months of the 2016 presidential
    Stocks rose on Wall Street, capping a wave of declines in
major world equity markets triggered by uncertainty over Trump's
    In other precious metals, spot palladium        fell for the
fourth straight session and was down 2.2 percent at $764.30,
after tapping the lowest since March 15 at $755.88 an ounce.
    Silver        slipped by 1.5 percent to $16.60 an ounce
while platinum        was down 1.3 percent at $929.49.

 (Additional reporting by Vijaykumar Vedala in Bengaluru;
editing by David Goodman and Chizu Nomiyama)

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