Gold turns lower after biggest rally since Brexit vote

Gold bars are pictured at the Ginza Tanaka store in Tokyo October 23, 2009. REUTERS/Issei Kato
Gold fell on Thursday as a bounce in the dollar prompted some buyers to cash in gains after its biggest one-day rally in nearly a year, though uncertainty over the outlook for the Trump presidency underpinned the metal near two-week highs. Gold surged nearly 2 percent on Wednesday, its biggest one-day jump since Britain’s June vote to leave the European Union, on reports that US President Donald Trump had tried to intervene in an investigation into alleged Russian interference in last year’s US election. “Late longs from yesterday are getting punished as bullion drops to $1,247, with stocks and dollar regaining a little traction amid increasing.
“Late longs from yesterday are getting punished as bullion drops to $1,247, with stocks and dollar regaining a little traction amid increasing realisation that the drama in Washington could take many months to play out,” said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York. Spot gold was down 1.1 percent at $1,246.92 an ounce by 2:32 p.m. EDT (1832 GMT), having touched its highest since May 1 at $1,265.04.
It fell to a session low of $1,245.40, around the 200-day moving average, after five straight sessions higher. U.S. gold futures for June delivery settled down 0.5 percent at $1,252.80. The U.S. dollar index rebounded from Wednesday’s currency six-month low after stronger-than-expected U.S. economic data. “(Gold) is seeing a pullback after yesterday’s strong performance – it needs to take a breather,” said Heraeus precious metals trader Alexander Zumpfe.
“It ran into resistance towards $1,260.” Nonetheless, sentiment has turned more positive and technical indicators are looking promising, he added. The latest reports on Trump came after a turbulent week in which he fired FBI Director James Comey and discussed sensitive national security information with Russia’s foreign minister, causing investors to question whether he can deliver on pledged tax cuts and deregulation.
Current and former U.S. officials familiar with the exchanges told Reuters on Thursday that Michael Flynn and other advisers to the Trump campaign were in contact with Russian officials and others with Kremlin ties in at least 18 calls and emails during the last seven months of the 2016 presidential race. Stocks rose on Wall Street, capping a wave of declines in major world equity markets triggered by uncertainty over Trump’s agenda.
In other precious metals, spot palladium fell for the fourth straight session and was down 2.2 percent at $764.30, after tapping the lowest since March 15 at $755.88 an ounce. Silver slipped by 1.5 percent to $16.60 an ounce while platinum was down 1.3 percent at $929.49.
Source: Reuters

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