The rise of stocks and dollar pushed gold prices lower by 1 percent on Wednesday, while tensions surrounding North Korea and approaching UK and French presidential polls build the safe-haven status of the bullion.
U.S. gold futures edged lower by $10.70 to settle at $1,283.40 an ounce for its June delivery. Spot gold was 0.68 percent lower at $1,280.50 an ounce.
An analyst at Julius Baer, Carsten Menke, says that the downfall of equity markets in Europe and the U.S. dollar will move against the bullion. She added that the market was also starting to ignore U.S. President Donald Trump’s impact on the country’s policy.
It is given that a stronger currency drives gold, which is considered a dollar-denominated asset, high priced with other currency owners.
Worries if Trump will enact the tax reduction and a series of depressing U.S. economic figures have fuelled a fast inflation prospect. Nevertheless, the declines of gold were surpassed by concerns over geopolitical tensions and elections.
Sam Laughlin, trader from MKS PAMP Group, said that the gold should seek reinforcement around $1,280 and $1,276, and was on a right track to test $1,300 as geopolitical crisis build the bullions safe-haven position. The price of the yellow metal will linger close to the trading range of $1,270 and $1,310 according to expectations of Wing Fung Financial Group head of research Mark To.
Meanwhile in other precious metals: Palladium was 0.28 percent higher at $776.70, Platinum however dropped by 0.63 percent and spot silver as well by 0.46 percent to settle at $18.17 an ounce.