Gold steadies after slide, but more losses expected | Reuters
By Eric Onstad | LONDON LONDON Gold recovered from a two-week low on Wednesday as speculators locked in profit from recent losses, but some analysts expect further weakness due to easing political risks. Spot gold was flat at $1,263.30 by 1400 GMT. Earlier in the session prices hit 1,260.90, their weakest since April 11.
By Eric Onstad
LONDON Gold recovered from a two-week low on Wednesday as speculators locked in profit from recent losses, but some analysts expect further weakness due to easing political risks. Spot gold was flat at $1,263.30 by 1400 GMT. Earlier in the session prices hit 1,260.90, their weakest since April 11. U.S. gold futures edged down 0.2 percent to $1,264.90.Gold has shed about 3 percent since touching a five-month peak on April 17."It's either profit-taking from those who went short or bargain-hunting from people who think the fall was too much, but I wouldn't say there's any strong fundamental reason behind it," said analyst Carsten Menke at Julius Baer in Zurich."You had a decent set of risk factors that supported gold over the past few weeks and I'd argue that most of them are priced out of the market again. That's why we believe that prices should reach $1,200 over the next three months."
Concern has ebbed about French politics after centrist presidential candidate Emmanuel Macron came first in the initial round of voting, while the threat of a U.S. government shutdown has also receded, diminishing gold's appeal as a safe haven. Gold also was hit by increased appetite for risky assets, with world stocks hitting a record high on Wednesday after strong earnings and the prospect of tax cuts for corporate America. [MKTS/GLOB] "Over the past two sessions, the momentum for gold to move ahead has actually faded away. We can see that risk appetite has increased after the easing situation in North Korea and French election results," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
U.S. Treasury Secretary Steve Mnuchin said the plan for "the biggest tax cut" in U.S. history due to be released later on Wednesday by the White House would cut the business tax rate to 15 percent, including for small businesses.Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.69 percent to 854.25 tonnes on Tuesday after 6 tonnes of inflows. [GOL/ETF]Spot silver dropped 0.7 percent to $17.43 an ounce, the lowest since March 22.
Platinum fell 0.7 percent to $946.60, while palladium rose 0.3 percent to $802.60.Palladium, mainly used in auto catalysts to curb air pollution, has held up better than other precious metals in recent days, rising slightly while the others were sliding."Palladium bucked the trend and prices were quite strong this week. We believe, however, this is too high, given that we're having a slowdown in global car sales from China and also the U.S.," said Menke."The palladium market is too bullish and we're still looking for a correction of at least 10 percent, moving towards $700." (Additional reporting by Swati Verma and Nallur Sethuraman in Bengaluru, Editing by Dale Hudson and Jon Boyle)
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