Gold futures falls on continued adjustment following French election

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Tuesday in a continued readjustment after the first round of French election on Sunday.

The most active gold contract for June delivery fell 10.3 U.S. dollars, or 0.81 percent, to settle at 1,267.20 dollars per ounce.

The market is continuing to price in the diminishing potential for the election of Le Pen in the final election on May 7. Le Pen was seen by the markets as a potentially destabilizing factor, driving investors to the precious metal as a safe haven because she has promised to hold a referendum on French participation in the European Union, which has led some investors to fear a repeat of Brexit.

Gold was put under extensive pressure as the U.S. Dow Jones Industrial Average rose by 251 points, or 1.21 percent as of 1915 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

The precious metal was prevented from falling further as the U.S. Dollar Index fell by 0.2 percent to 98.84 as of 1915 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

No major economic reports are expected to be released on Wednesday, but traders are waiting for the durable goods orders, international trade in goods, and weekly jobless claims on Thursday, and finally the gross domestic product report on Friday.

Silver for May delivery fell 26.7 cents, or 1.50 percent, to close at 17.591 dollars per ounce. Platinum for July delivery dropped 2.6 dollars, or 0.27 percent, to close at 957.60 dollars per ounce. Endit