April 27, 2018 / 10:36 AM / 3 months ago

PRECIOUS-Gold gains but remains vulnerable after Korean leaders meet

    * Gold on track for second weekly fall
    * Silver set for biggest weekly fall in nearly three months
    * Platinum hits four-month low

 (Recasts throughout, updates prices; adds comment, second
byline NEW YORK to dateline)
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, April 27 (Reuters) - Gold edged higher on
Friday after the dollar and U.S. Treasury yields backed off
highs, but the prospect of a Korean denuclearisation deal eroded
bullion's safe-haven appeal.
    Spot gold        gained 0.4 percent at $1,321.81 per ounce
by 1:37 p.m. EDT (1737 GMT). U.S. gold futures         for June
delivery settled up $5.50, or 0.42 percent, at $1,323.40 per
ounce. 
    "The combination of the dollar retreating and the U.S.
Treasury yields retreating below 3 percent is giving gold a
boost," said Walter Pehowich, executive vice president of
investment services at Dillon Gage Metals.
    U.S. 10-year Treasury yields            , the benchmark of
global interest rates, retreated further from the 3 percent
level they initially hit on Wednesday.                   
    A rise in U.S. bond yields typically pressures gold by
reducing the attractiveness of non-yielding bullion, which is
priced in dollars.
    However the softer U.S. Treasury yields and dollar, and gold
dropping to a key support level sparked buying, said Bart Melek,
head of commodity strategy at TD Securities in Toronto.
    "We bounced off the technical level 100-day moving average,
which was $1,320 and we just moved above it, primary because the
rates in the U.S. moderated a little bit." 
    While the U.S. dollar's gains extended, the move was muted
against a basket of major currencies.              
    Gold was on track to finish the week nearly 1 percent down
for its second consecutive weekly decline and the biggest weekly
drop in four.    
    The leaders of South and North Korea embraced after pledging
on Friday to work for the "complete denuclearisation of the
Korean peninsula".                 
    "We have the pictures from the meeting of the two Korean
leaders today, showing geopolitical hotspots have calmed down
massively, so there's scant argument to be bullish on gold at
the moment," said Carsten Fritsch, commodity analyst at
Commerzbank in Frankfurt.
    Silver        dropped 0.2 percent at $16.45 an ounce. It is
down more than 3 percent this week, the biggest weekly drop
since the week ending Feb. 2.
    Platinum        was down 0.9 percent at $913.90 an ounce
after touching $900.50, its weakest since Dec. 18. It was headed
for a nearly 1 percent weekly decline.
    Palladium        lost 1.5 percent at $970.22 an ounce,
poised for a nearly 6 percent weekly drop. It had rallied nearly
10 percent since U.S. sanctions were imposed on Russian entities
on April 6. Russia is the world's biggest producer of palladium.

 (Reporting by Renita D. Young
Editing by Chizu Nomiyama)
  
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