Home Economy Gold Climbs Quietly as Investors Wary Ahead of French Vote

Gold Climbs Quietly as Investors Wary Ahead of French Vote

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                Gold Climbs Quietly as Investors Wary Ahead of French Vote

Gold prices rose slightly on Friday as investors awaited the first-round of voting in the presidential French election at the weekend and possible announcements about tax changes in the United States.

Spot gold was up 0.3 percent at $1,284.62 an ounce by 2:30 p.m. New York time, on track to close the week little changed after five straight weeks higher. U.S. gold futures settled up 0.4 percent at $1,289.10.

"The big news over the weekend will be the French election and the market will be to an extent on hold ahead of that," said Mitsubishi commodities analyst Jonathan Butler. There was potential for safe-haven buying of gold after France said security forces were fully mobilized for the weekend vote after an Islamist militant killed a policeman Thursday night.

"Into the near term, if the geopolitical tensions intensify, there is a chance that gold prices will reach $1,300 or more," OCBC analyst Barnabas Gan said.

A move in gold above $1,290/91 would be significant as it would break above a downtrend that has been in place since gold touched an all-time high of $1,920.30 in 2011, Butler said.

"You would have thought with the Champs-Elysees attack that you would have got a little more safe-haven buying ahead of the French election," said Rob Haworth, senior investment strategist for U.S. Bank Wealth Management in Seattle. "If you're in the gold market, there's already stretched speculation and there's not a lot of new news to drive it. So in the meantime it's probably time for a bit of a pause," he said.

Investors were also watching events in Washington. President Donald Trump's administration will unveil a tax reform plan soon and expects it will be approved by Congress this year, Treasury Secretary Steven Mnuchin said on Thursday.

Gold is at risk of some profit-taking after a strong recent run, but should be supported by other factors, analysts said.

"Gold struggled to hold this week's gains as the dollar strengthened and concerns over global risk eased. However, selling was relatively muted, which suggests a period of consolidation is now upon us," ANZ analysts wrote in a note.

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