• Gold prices have fallen from near seven-month highs on a stronger US dollar and after a written testimony by a former FBI director to the US Senate was seen as containing few surprises, but declines were limited as uncertainty from the UK election remained.
• Former Federal Bureau of Investigation Director James Comey said US president Donald Trump asked him to drop a probe of former national security adviser Michael Flynn as part of an investigation into whether Russia meddled in the 2016 election, according to testimony from Comey posted on the Senate Intelligence Committee's website.
• "Gold trading near lows of the session as Comey's written remarks confirm he told the president more than once that he was not personally under investigation and contain no hints of what could be obviously considered obstruction," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
"The Q&A will be a circus and can't rule out something juicy but so far those hoping for a smoking gun may have instead found a child's water pistol."
• Spot gold was down 0.6 per cent at $US1,285.17 an ounce by 3.34 pm Wednesday EDT (0534 Thursday AEST). On Tuesday, it gained 1.1 per cent to its highest since November 2016 at $US1,295.97. US gold futures slipped to settle at $US1,293.2.
• Dealers said comments late in the session from the head of US Missile Defence Agency saying North Korea ballistic missile advances in the past six months have caused him "great concern" triggered modest buying in gold.
• Investors stepped up buying of the world’s largest gold-backed exchanged traded fund by the most in seven months amid concern about the outcome of European elections and a more aggressive U.S. stance on North Korea, Syria and Iran.
Holdings in SPDR Gold Shares climbed 1.4 percent Wednesday to 860.76 metric tons, the biggest one-day increase since September and the highest since Dec. 7.
• "As such, I expect the price of gold will continue to head higher, as a two-step forward, one-step back improvement in the price. I believe the next level of resistance is the $US1,295 range," said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals.
"If we can trade through that level, I expect an obvious speed bump at the $US1,300 dollar level."
• In Britain, markets are worried the ruling Conservative party might not get a majority in Thursday's elections. Prime Minister Theresa May wants to increase her majority to strengthen Britain's hand in exit talks with the European Union.
• Traders are also looking ahead to a meeting of the US Federal Reserve next week.
• "We do expect gold to hit some turbulence as we approach the June Fed rate hike, but things could open up for the precious metal post-meeting if the central bank's language remains dovish," said INTL FCStone analyst Edward Meir.
• Gold will end the year higher, spurred by faster inflation and political tensions in Russia, Syria and North Korea, according to Intesa Sanpaolo SpA, the best forecaster for the metal last quarter.
Prices could take a v-shaped path this year, with a swoon coming mid-year as the Federal Reserve raises U.S. interest rates, said Daniela Corsini, an analyst at the bank. Gold will likely bounce back by year-end, reaching a high of $1,350 an ounce in the fourth quarter, she predicted.
That would leave bullion at the highest level since September. Prices have risen 12 percent this year, supported by inflation concerns and a mix of geopolitical worries, including North Korea’s nuclear ambitions and U.S. airstrikes in Syria and Afghanistan.
• “Markets will surely remain nervous about this uncertainty,” she said by phone from Milan on Tuesday. “And if economic data in the U.S. remains strong, then gold will regain its role as an inflation hedge.”
• Silver was down 0.5 per cent at $US17.57 an ounce.
Reference: Reuters, Bloomberg, Business News
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