Gold price slips on stronger dollar; political uncertainty provides support
London (Mar 30) Gold prices inched down on Thursday as the dollar strengthened, but uncertainty surrounding the impact of Britain's departure from the European Union and upcoming French elections offered support. Gold is witnessing a correction after failing to break above its 200-day moving average around the $1,260 level, analysts said. "Prices are not likely to witness a big drop particularly because of the Brexit and French elections as they (are offering) very good support for gold at this time," said Brian Lan, managing director at gold dealer GoldSilver Central in Singapore. Spot gold <XAU=> was down 0.1 percent at $1,250.66 an ounce by 0726 GMT.
U.S. gold futures <GCcv1> slipped 0.3 percent at $1,250. "Resistance continues to be at $1,260, the 200-day moving average... $1,240 is a pivotal support in the short term. A break of $1,240 should see short-term stop-loss sellers appearing," said Jeffrey Halley, senior market analyst, OANDA. Prime Minister Theresa May formally began Brexit - Britain's divorce from the EU - on Wednesday, declaring there was no turning back and ushering in a tortuous exit process that will test the bloc's cohesion and pitch her country into the unknown. [nL5N1H60Q8] "The market seemed to take the notification of the Article 50 in the UK relatively smoothly, but I suspect the worst is yet to come on that. We'll see how negotiations develop and the market is taking the wait and see approach at the moment," said ANZ analyst Daniel Hynes. "But certainly, there was a tiny bit of safe-haven buying."
Meanwhile, French centrist Emmanuel Macron is on course to come out on top of the first round of France's presidential election next month and go on to win in the May 7 runoff against far right leader Marine Le Pen, an Elabe poll showed on Wednesday. [nL5N1H668Q] The dollar edged up to a nine-day high against a basket of currencies on Thursday, pressuring gold. [USD/] A strong greenback makes dollar-denominated gold more expensive for holders of other currencies, potentially decreasing demand. The dollar was also boosted by Chicago Fed President Charles Evans, who said he was in line with most of his colleagues in supporting further rate hikes this year. [nL2N1H5299] In other precious metals, spot silver <XAG=> slid as much as 0.4 percent to $18.15 an ounce, after hitting a four-week high of $18.25 in the previous session. Platinum <XPT=> rose 0.4 percent to $955.20 per ounce, while palladium <XPD=> was down 0.4 percent at $786.93.
Source: Nasdaq
