Gold slips as dollar and shares rise

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Gold fell 1 percent on Wednesday as the dollar and stocks gained, though tensions over North Korea and upcoming French and UK elections underpinned demand in the safe-haven asset.

Spot gold was down 0.68 percent to $1,280.50 per ounce. U.S. gold futures for June delivery were $10.70 lower to settle at $1,283.40.

The Fed released the Beige Book on Wednesday, noting that economic activity increased at a modest pace.

"The dollar is down and European equity markets are also down which moves against gold because it's a safe-haven asset," said Carsten Menke, an analyst at Julius Baer, adding that the market was also beginning to discount President Trump's influence on U.S. policy.

A stronger greenback makes dollar-denominated assets such as gold more expensive for holders of other currencies and higher appetite for risk boosts stocks and puts pressure on bullion.

A run of disappointing U.S. economic data and doubts the Trump administration will progress with tax cuts have quelled expectations of faster inflation.

However, gold's losses were capped by uncertainties over elections and geopolitical tensions.

U.S. Vice President Mike Pence said Washington would work with its allies and China to put economic and diplomatic pressure on North Korea but added America would defeat any attack with an "overwhelming response."

"Investors are still using gold for insurance and defensive positioning because there are concerns over equity valuations and politics," said ETF Securities analyst Martin Arnold.

In France, investors remained nervous ahead of the first round of the country's presidential election on Sunday, as a closely-watched poll showed the first round of voting is too close to call, while pegging centrist Emmanuel Macron as the favorite to win overall.

British Prime Minister Theresa May's call for a snap general election added to a lengthening list of uncertainties for investors already on edge over geopolitical tensions.

Wing Fung Financial Group's head of research Mark To said he expected gold prices to hover near $1,280, trading in a range between $1,270 and $1,310.

MKS PAMP Group trader Sam Laughlin said gold should find support around $1,280 and $1,276, and was well positioned to test $1,300 as geopolitical concerns underpinned its safe-haven status.

Spot silver dropped 0.46 percent to $18.17 per ounce.

Platinum fell 0.63 percent to $967.40, while palladium was up 0.28 percent at $776.70 after touching a more than four-week low of $769.80 on Tuesday.