Gold slips on firmer dollar; political uncertainty supports

Source: World Gold Council

Gold dipped on Thursday as the dollar strengthened, but economic uncertainty around Britain's departure from the European Union and the approaching French elections capped losses.

The potential for the rise of the far right in European elections this year, along with British Prime Minister Theresa May formally triggering divorce proceedings from the EU on Wednesday has served to enhance gold's appeal as a safe-haven investment, negating some of the effects of a strong dollar.

"We might see support from the French elections if the results are better than expected," Bernard Dahdah, a precious metals analyst at Natixis, said. Emmanuel Macron is on course to come out on top of the first round of France's presidential election next month and go on to

Spot gold was down 0.46 percent at $1,246.24 an ounce. U.S. gold futures for April delivery were $8.70 lower, settling at $1,245. Gold futures for June delivery were down $8.80 to settle at $1,248.

Tracking gold prices

"The market seemed to take the notification of the (triggering of) Article 50 in the UK relatively smoothly, but I suspect the worst is yet to come on that," said ANZ analyst Daniel Hynes.

"But certainly, there was a tiny bit of safe-haven buying."

The dollar edged up to a nine-day high against a basket of currencies on Thursday. A strong greenback makes dollar-denominated gold more expensive for holders of other currencies, potentially lowering demand.

Pro: At one-month high, gold feels too extended

The dollar was also boosted by Chicago Fed President Charles Evans, who said he was in line with most of his colleagues in supporting further rate hikes this year.

"The market has priced in two interest rate increases this year, but if we see three there could be downside pressure towards gold prices," said ETF Securities analyst Nitesh Shah.

In other precious metals, fell 0.13 percent to $18.18 an ounce, after hitting a four-week high of $18.25 the session before.

rose 0.01 percent to $951.60 per ounce, while was up 0.85 percent to $796.75.