Gold prices eased in Asia on Wednesday in a bout of mild profit-taking as geopolitical tensions on the Korean peninsula appear off the boil for now, though investors stayed cautious with elections ahead in Europe and with an eye on U.S. monetary policy.
Gold for June delivery on the Comex division of the New York Mercantile Exchange dipped 0.28% to $1,290.50 a troy ounce. Silver futures traded at $18.290 a troy ounce, up 0.10%, while copper gained 0.12% to $2.533 a pound.
Overnight, gold prices rose on Tuesday, as investors piled into safe haven assets amid continued uncertainty surrounding the outcome of the French Elections and rising geopolitical tensions in North Korea, Russia and Syria.
Gold recovered from early session lows, to trade near five-month highs, as the flight to safety trade resumed, after UK Prime Minister Theresa May announced plans to call an early election.
Although UK opinion polls suggested May would significantly increase her parliamentary majority of 17 during the election, the decision to call a snap election, after she said that the next general election would be held as scheduled in 2020, represents an element of risk.
Meanwhile, uncertainty surrounding the outcome of the French Presidential elections propped up demand for safe-haven gold, as investors braced for the outcome of the first round of French Presidential elections, which is set to be held on April 23.
Geopolitical tensions weighed on the greenback, as the US Dollar Index Futures fell to a session low of 99.40, making dollar-denominated commodities such as gold more attractive.
Dollar-denominated gold is sensitive to moves in the dollar – A dip in the dollar makes dollar-denominated assets such as gold cheaper for holders of foreign currency and thus, increases demand.