Gold edged lower on Thursday as investors awaited cues on market direction amid a number of geopolitical events later in the day that could boost the safe-haven demand for the metal. Polls open in the UK national elections later on Thursday while the European Central Bank (ECB) may discuss dropping additional stimulus pledges at a meeting later and former United States Federal Bureau of Investigation director James Comey will testify before the U.S. Congress about his interactions with President Donald Trump later in the day.
“A lot of things are happening at the same time… There may be some kind of impact that may push up the volatility rather than the direction of price moves,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group. “Gold is likely to fluctuate somewhere between the $1,280-$1,300 range,” he said. Spot gold was down 0.2 percent, to $1,284.24 per ounce at 0439 GMT. U.S. gold futures for August delivery dipped 0.5 percent to $1,286.80 an ounce.
The yellow metal fell from a near seven-month high on Wednesday after Comey’s written testimony to the U.S. Senate contained few surprises. Comey’s testimony did say President Trump asked him to drop an investigation of former national security adviser Michael Flynn as part of a probe into Russia’s alleged meddling in the 2016 presidential election. However, uncertainty surrounding the UK poll, which Prime Minister Theresa May called for to strengthen her hand in looming Brexit talks, kept bullion’s losses in check.
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A final flurry of opinion polls gave May’s Conservative Party a lead between 5 and 12 percentage points over the main opposition Labour Party, suggesting she would increase her majority – but not win the landslide foreseen when she called the election seven weeks ago. “At these levels, gold may already have a lot of today’s event risk built into its price,” said Jeffrey Halley, senior market analyst at OANDA.
“That said, with the (UK poll) results coming out during the Asian session tomorrow morning, the downside for gold is likely to be limited as we run into the weekend,” he said. Meanwhile, the ECB is likely to keep its easy monetary policy during its meeting as inflation remains below its target despite stronger economic growth in the euro zone.
However, some policymakers may take a better view of the economy and drop some pledged to ramp up stimulus. In other precious metals, palladium gained 0.1 percent to $835.20 an ounce. It fell 2.3 percent on Wednesday in its biggest one-day percentage fall in three weeks having hit a fresh near three-year high of $859.80 earlier in the day. Platinum was down 0.02 percent at $941.80 per ounce, and silver rose 0.2 percent to $17.59.