FIN: Gold slips as dollar rises, but geopolitical worries support
By Zandi Shabalala
LONDON (Reuters) - Gold edged lower on Wednesday as the dollar gained, but tensions over North Korea and upcoming French and UK elections underpinned investor demand in the safe-haven asset.
Spot gold slipped 0.57 percent at $1,281.91 per ounce as of 1129 GMT, but was still near its highest level since November touched on Monday of $1,295.42.
U.S. gold futures were 0.8 percent lower at $1,283.90.
U.S. Vice President Mike Pence said Washington would work with its allies and China to put economic and diplomatic pressure on North Korea but added America would defeat any attack with an "overwhelming response."
"Today's move is just a bit of a pause because we are still seeing pretty decent investor interest in gold," said ETF Securities analyst Martin Arnold.
"Investors are still using gold for insurance and defensive positioning because there are concerns over equity valuations and politics," he said.
In France, investors remained nervous ahead of the first round of the presidential election on Sunday. A closely-watched poll showed the first round of voting was too close to call, although centrist Emmanuel Macron remained favourite to win overall.
British Prime Minister Theresa May's call for a snap general election added to a list of uncertainties for investors already on edge over geopolitical tensions.
"Political and geopolitical issues are for sure supportive elements at the moment," said Andrea Aratoli, head of trading at Argor-Heraeus.
"The gold price is reflecting the uncertainty of the global economy. Even if the U.S. economy is posting a significant growth, sentiment in markets is mixed," Aratoli said.
Wing Fung Financial Group's head of research Mark To said he expected gold prices to hover near $1,280, trading in a range between $1,270 and $1,310.
MKS PAMP Group trader Sam Laughlin said gold should find support around $1,280 and $1,276, and was well positioned to test $1,300 as geopolitical concerns underpinned its safe-haven status.
Spot silver dropped 0.6 percent to $18.14 per ounce.
Platinum rose 0.4 percent to $976.90, while palladium was down 0.1 percent at $773.65 after touching a more than four-week low of $769.80 on Tuesday.