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Gold steady as traders lock in profits after two weeks of gains

Gold was little changed on Tuesday as the dollar steadied near 6-1/2 month lows and traders locked in profits following two weeks of gains, shrugging off heightened political risk following a deadly suicide attack in Britain.

The blast, which killed at least 22 people, weighed on sterling versus the dollar, but the U.S. currency was flat versus a currency basket following recent sharp falls, leaving little to prompt investors to bet bullion higher.

"Gold is taking a breather once again, its struggling to make it out of this $1,245-$1,265 range," said Ole Hanson, head of commodity strategy at Saxo Bank.

PROSPECTING GOLD
AP

"At this stage, unless we get other developing (political risk) stories, the market is not prepared to break this range until further guidance from the Federal Open Market Committee."

Spot gold inched down 0.48 percent at $1,255.40 per ounce having gained some 3.6 percent since May 9, while U.S. gold futures fell $5.90 to settle at $1,255.50 an ounce.

The safe-haven metal has been supported by a fall off in U.S. economic data and political uncertainty surrounding President Donald Trump, all of which have weighed on the dollar. The greenback is down about 7 percent this year, reversing all of its gains following Trump's election win last year.

The euro also set a six-month month high against the dollar on Tuesday as the latest economic data from the bloc made for encouraging reading, especially in Germany.

Still, Federal Reserve fund futures were up again, showing a 75 percent chance of a rate rise in early June and deterring investors from pushing gold higher until further word from the Fed on the likely trajectory for rate increases this year.

In the wider market, U.S. stock index futures ticked up ahead of Trump's first full budget plan, while European shares posted gains following encouraging economic data that helped lift the euro to a six-month high versus the dollar.

Among other precious metals, silver gained 0.11 percent at $17.14 an ounce.

Platinum was up 0.03 percent at $946.30 an ounce, having earlier hit its highest in more than three weeks.

Palladium rose 0.06 at $771 per ounce. It fell to a more than two-month low in intraday trading on Monday but recovered to end the day 1.5 percent higher, its biggest one-day percentage gain since April 20.