Gold prices fell on Tuesday as markets became less concerned that far-right leader Marine Le Pen would win the French presidential election, increasing investor appetite for risky assets such as stocks while denting bullion. Spot gold was down 0.5 percent at $1,269.20 per ounce at 1355 GMT.
US gold futures slipped 0.4 percent to $1,272. Business-friendly centrist Emmanuel Macron won the first round of the French vote on Sunday and opinion polls indicated less support for Le Pen. The news sent bullion prices to their lowest since April 11 at $1,265.90 in the previous session. "We've moved from having multiple numbers of positive drivers for gold last week when yields were on the defensive and we had multiple geopolitical risks," said Ole Hansen, head of commodity strategy at Saxo Bank.
"But now with the French election (first round) behind us, there is a bit of a surge of risk-on coming back to the market. The main worry was a strong performance by Le Pen." Gold is often seen as an alternative investment during times of political and financial uncertainty. Heightened security risks provided some support. North Korea conducted a live-fire exercise on Tuesday as a US submarine docked in South Korea in a show of force amid concern over Pyongyang's nuclear and missile programmes.
Hansen said gold would trade cautiously this week before a Friday deadline for the US Congress to pass a spending bill funding the government through September or risk a government shutdown. Holdings of SPDR Gold, the world's largest gold-backed exchange-traded fund, rose 0.17 percent to 860.17 tonnes on Monday. Holdings have risen six tonnes in the past two sessions, indicating investor interest in the perceived safe-haven asset.
But on the technical front, gold faces the potential for a downside correction if and when uncertainty fades, said Jeffrey Halley, senior market analyst at OANDA. "Gold has resistance at $1,290 and then $1,296, having failed in this area numerous times last week. Below, support lies at $1,265.50 and then the 200-day average at $1,254.80. A daily close below $1,240 would signal a much larger correction could be on the way," Halley said.
Silver dipped 0.8 percent to $17.85 an ounce after touching a one-month low of $17.65 in the previous session. Palladium fell 0.4 percent to $793 an ounce. Platinum inched down 0.7 percent to $951.81 an ounce after falling more than 1 percent in the prior session.
Asset manager ETF Securities said in a note said it expects "modest upside" for platinum given "expectations for continued global recovery in growth and manufacturing, and a record discount to the gold price." "The downside risks for platinum appear more limited than the potential upside risks," it said.
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