Gold prices slipped on Monday as the dollar rose and equities climbed, but political and economic uncertainties in the United States and Europe are expected to provide support for now. The spot price was down 0.7 percent at $1,225.71 an ounce by 2:51 pm EST (1951 GMT), falling further below last week's three-month high of $1,244.67. US gold futures settled down 0.8 percent at $1,225.80.
The dollar hit a two-week high against the yen as investors focused again on the US reflation trade which dominated in the aftermath of Donald Trump's election as US President in November, but has stalled this year. A higher US currency makes dollar-denominated commodities more expensive for holders of other currencies, potentially subduing demand. In Europe, national elections this year starting with the Netherlands at the end of March make for an uncertain political outlook.
The first round of the presidential elections in France follows in April, with the possibility of a victory for Marine Le Pen of the National Front arousing much uncertainty. "Support for gold because of politics will hold this side of the French election," said Danske Bank analyst Jens Pederson. Meanwhile silver eased 0.7 percent to $17.83 per ounce, while platinum lost 1.2 percent to $998.50 per ounce. Palladium was down 1.4 percent at $773.25 per ounce, after reaching the highest since January 25 at $786.90.
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