* Gold on track for first weekly drop in six
* Investors cautious ahead of French election on Sunday
* Silver falls for 5th session, heads for worst week in over
By Sethuraman N R
April 21 Gold held steady on Friday, with
safe-haven demand remaining intact as investors kept an eye on
the upcoming French presidential vote that is seen as too close
Spot gold was down 0.1 percent at $1,280.01 per
ounce, as of 0722 GMT, on track for its first weekly drop in
U.S. gold futures slipped 0.2 percent at $1,281.40.
"I would expect investors to stay on the fence... they would
likely be market-watching rather than market-trading ahead of
the French elections on Sunday, especially when there is no
clarity," OCBC analyst Barnabas Gan said.
"Into the near term, if the geopolitical tensions intensify,
there is a chance that gold prices will reach $1,300 or more."
A closely-watched Cevipof opinion poll published earlier
this week showed frontrunners Emmanuel Macron and Marine Le Pen
both losing some momentum ahead of Sunday's first round, and
conservative Francois Fillon and far-left candidate Jean-Luc
Melenchon still in contention for the second round run-off.
"Assuming the weekend passes without surprises
election-wise, there is potential for a correction on Monday as
safe-haven hedges are lightened," said Jeffrey Halley, senior
market analyst, OANDA.
"From a chart perspective, gold appears to have run out of
momentum, having made a series of lower highs over the past few
Higher U.S. interest rates could also dent demand for
On Thursday, Dallas Federal Reserve President Robert Kaplan
said that two more interest rate hikes this year remains
possible but that the U.S. central bank has the flexibility to
wait and see how the economy unfolds.
"Gold struggled to hold this week's gains as the dollar
strengthened and concerns over global risk eased. However,
selling was relatively muted, which suggests a period of
consolidation is now upon us," ANZ analysts wrote in a note.
SPDR Gold Trust , the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.76 percent to
854.25 tonnes on Thursday. The outflows follow a 11.8-tonne
increase on Wednesday, the biggest one-day inflow since
Spot silver declined 0.3 percent to $17.95, extending
losses into the fifth session. Silver has fallen about 3 percent
so far this week.
Platinum slipped 0.7 percent to $970.90, while
palladium rose 0.2 percent to $798.55, after rising over
3 percent in the previous session.
(Reporting by Nallur Sethuraman in BENGALURU; Editing by Sherry
Jacob-Phillips and Biju Dwarakanath)