Gold prices eased in Asia on Thursday, but remained supported ahead of French polls at the weekend and as Britain gets set to head to the polls this summer highlights political risk.
Gold for June delivery on the Comex division of the New York Mercantile Exchange fell 0.23% to $1,280.50 a troy ounce. Silver futures traded up 0.10% to $18.180 a troy ounce while copper fell 0.16% to $2.524.
On Thursday, Australian miner Rio Tinto (LON:RIO) cut its copper production target due to a strike at the Escondida copper mine in Chile and the ongoing shutdown at the Grasberg mine in Indonesia in its first quarter production report, which also showed that bad weather had weighed on production from its Western Australian iron ore operations and its bauxite business in Queensland.
Overnight, gold prices fell on Wednesday, as demand for the precious metal eased, after the dollar bounced off session lows, despite ongoing geopolitical tensions over North Korea.
Gold futures pulled back from near five-month highs earlier during the session, after the dollar mounted a recovery from heavy losses sustained in the previous session.
The dollar bounced off session lows, despite continued geopolitical tensions over North Korea and lower expectations of a June rate hike, after Treasury Secretary Steven Mnuchin admitted that the Trump administration no longer expects to complete tax reform, which is viewed as a pro-growth policy, by August.
According to Investing.com’s Fed rate monitor tool, 40% of traders expect the Federal Reserve to hike interest rates in June, compared to 52.8% of traders in the previous week.
Gold is sensitive to moves in U.S. interest rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Geopolitical tensions persisted, after a North Korea official said on Monday, the Kim Jong Un led nation would continue to regularly test missiles.
Elsewhere, the British Parliament approved Prime Minister Theresa May’s call for an early election. UK opinion polls suggest PM May would comfortably increase her parliamentary majority in the general election.
Meanwhile, uncertainty surrounding the outcome of the French presidential elections underpinned gold prices, as investors braced for the outcome of the first round of French presidential elections, which is set to be held on April 23.
