Gold falls as stocks, dollar rally

Gold is surging

Gold is surging

Spot gold was up 0.2 percent at $1,263.06 an ounce at 1102 GMT, while USA gold futures for June delivery were up $4.20 an ounce at $1,262.90.

At 1:37pm BST, the Comex gold futures contract for the June delivery was up 1.01% or $12.30 at $1,248.70 an ounce, while spot gold was trading at $1,249.58 an ounce, up 1.00% or $12.34 an ounce.

Gold traded with a firm tone during Tuesday's NY session as the dollar remained under pressure, although ranges were relatively narrow. The Comey memo, first reported by the New York Times, caused alarm on Capitol Hill and raised questions about whether Trump tried to interfere with a federal investigation.

Despite a small dip in the commodity's value as of this writing, gold has been the beneficiary of the political turmoil that has racked the US since Donald Trump assumed the presidency.

Risk aversion sentiment due to recent global developments including the North Korean missile test, the massive "ransomware" cyber attack and controversies surrounding U.S. President Donald Trump could lift gold prices over the next two weeks, Wing Fung's To added.

"This is related to a flare-up of geopolitical risks with what's happening in the USA with Trump and Russian implications", Capital Economics analyst Simona Gambarini said.

Gold has rebounded following Trump's firing of FBI Director James Comey a week ago, as well as reports he shared intelligence with Russian officials.

Gold prices have pushed higher amid ongoing safe-haven buying, as geopolitical risks rose, ANZ said in a note. We have also seen the market expectations of a rate hike in the USA in June begin to evaporate, amidst the heat of the political debate in the U.S. and this is again a dollar negative and we are seeing some roll back in the pricing in of the rate hike over the last couple of days.

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Stocks fell and 10-year US Treasury yields were at the lowest since April 21.

Meanwhile, a recent run of disappointing USA economic data, including inflation, retail sales and housing starts has also weighed on the dollar, tempering expectations for higher interest rates.

The precious metal is sensitive to moves in US rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

The yellow metal rose 0.3% on Friday.

Silver was 1.1 percent up at $17.01 an ounce and platinum was 1 percent higher at $946.70 an ounce.

Palladium edged up 0.1pc to $797.60 an ounce.

Spot gold may rise more to $1,245 per ounce, as it has cleared a resistance at $1,233, according to Reuters technical analyst Wang Tao.

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