Gold futures settle higher amid dollar wobble

Gold edged lower on Wednesday as the dollar gained, but escalating tension over North Korea and upcoming French and United Kingdom elections boosted investor demand in the safe-haven asset.

North Korea made a failed missile test launch on Sunday, adding to regional tensions that have escalated over the past weeks as U.S. President Donald Trump has taken a tough rhetorical line with Pyongyang.

The United States, its allies and China are working together on a range of responses to North Korea's latest failed ballistic missile test, US President Donald Trump's national security adviser said on Sunday, citing what he called an global consensus to act.

However, Monday afternoon the dollar and yields picked up as did risk sentiment, following an interview with the U.S. Secretary of Treasury, Steven Mnuchin, published by The Financial Times.

Spot gold was down 0.2% to US$1,286.40 per ounce as of 0314 GMT.

Benchmark Brent crude futures were down 43 cents at $55.46 a barrel, while US crude futures were down 45 cents at $52.73.

Usually, the daily sales of the 1-kilgoram gold bar averages at 20 units but the daily sales has edged up to average at 50 units per day since the beginning of last week.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.77 percent to 848.92 tonnes on Thursday from 842.41 tonnes on Wednesday.

Uncertainties over Trump's policy towards North Korea have been growing since the U.S. Navy fired 59 Tomahawk missiles at a Syrian airfield on April 6.

Spot silver dropped 0.5pc to $18.13 per ounce.

Adding to these concerns, the USA military last week dropped the largest non-nuclear device it has ever used in combat on a network of caves and tunnels used by Islamic State in eastern Afghanistan. A close at current trading levels would be the lowest for the contract in just over a week.

"Ultimately we think the [dollar] rally can resume as markets start to focus on stronger USA growth driven by capital expenditure which could drive inflation higher", said Morgan Stanley analysts in a note.

June gold GCM7, -0.63% fell $10.70, or 0.8%, to $1,283.60 an ounce.

Platinum fell 1.1 percent to $962.99, while palladium was up 0.2 percent at $776.

  • Eleanor Harrison