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Gold Prices Steady On UK Election Risk; ECB Meeting and Geopolitical Risk

by Mark O’Byrne, Gold Core:

* Gold prices could see strong intraday volatility – analyst
* UK election, Ex-FBI director testimony, ECB meeting set for later in the day
* Downside for gold is “limited” (especially in sterling)

Gold held steady 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.

Polling has started in the UK national elections, 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.

“Unless there is a major surprise today and the Labor Party gets up over the Conservatives, I doubt there will be much reaction to gold price from the UK election. The market has already priced this,” said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.

“A more bullish forecast (from ECB meeting) is likely to lead to a movement away from gold to higher-yielding assets, although any move will be modest.”

Spot gold was nearly flat at $1,285.91 per ounce, as of 0809 GMT. U.S. gold futures for August delivery dipped 0.4 percent to $1,288.20 an ounce.

“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.

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