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Gold falls on dollar strength amid UK vote uncertainty

Gold fell for a third day on Friday as the dollar firmed after the UK national election left no single party with a claim to power though most investors seemed to shrug off the uncertainty.

With the majority of seats counted, incumbent Prime Minister Theresa May's Conservative Party had no way to win an outright majority in parliament.

She had called the election to gain a stronger mandate before launching into arduous divorce talks with the European Union.

"The poll verdict could create mild risk aversion which should be mildly supportive for gold; but depends on what sort of negotiations take place between the EU and UK (over Brexit)," NAB analyst John Sharma said. "For now, looks like the market has taken this in its stride."

Spot gold was down 0.77 percent at $1,269.60 per ounce. The yellow metal is poised for its first weekly drop in five.

U.S. gold futures for August delivery were 0.89 percent lower at $1,267.06. Dollar-denominated gold typically falls in value when the greenback gains.

Earlier in the day, gold was pressured by events in the United States, including former Federal Bureau of Investigation (FBI) director James Comey's Congressional testimony and
improving economic data.

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AP

Comey accused President Donald Trump of firing him to try to undermine the FBI's investigation of possible collusion by his campaign team with Russia's alleged efforts to influence the 2016 U.S. presidential election.

However, his statement was seen containing no major surprises. Meanwhile, the number of Americans filing for unemployment benefits fell last week, unwinding half of the prior period's jump and suggesting the labor market was tightening despite a recent slowdown in job growth.

"Looking at the developments in the UK and in the U.S. as well as at the recent ECB meeting, we
think of these as business as usual," said Joshua Rotbart, managing partner, J. Rotbart & Co in Hong Kong.

"The road is bumpy and the price follows, but assuming no major armed conflict in sight, or any other developments that may result in an impeachment process of President Trump, we believe prices will bounce back and forth in response to performances of other assets classes."

The dollar index, which measures the greenback against a basket of major currencies, was up 0.44 percent at 97.35.

Among other precious metals, palladium climbed as much as $864.50 an ounce, its highest since September 2014.

Silver slipped 0.86 percent to $17.23 per ounce, while platinum edged 0.8 percent higher to $939.70.