Dubai Gold Update: First weekly drop this week

24 k gold in Dubai was priced at Dh154.75 after its first slip this week.

Gold held steady on Friday with tensions surrounding upcoming French elections underpinning the safe-haven demand, but the yellow metal was on track for its first weekly drop in six.    
Spot gold was down 0.1 percent at $1,279.80 per ounce, as of 0343 GMT.  US gold futures slipped 0.2 percent at $1,281.60.
Security concerns took centre stage on Friday in the last days of France's tight presidential race in the wake of a shooting in Paris which killed one policeman.               
Polls ahead of the two-round French presidential vote, which begins on Sunday, give both far-right and far-left candidates a chance of making it into next month's run-off, though centrist candidate Emmanuel Macron is shown in the lead.            
"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, adding polls could be unreliable.
"Into the near term, if the geopolitical tensions intensify, there is a chance that gold prices will reach $1,300 or more."
Dallas Federal Reserve President Robert Kaplan said on Thursday that two more interest rate hikes this year remains possible but that the US central bank has the flexibility to wait and see how the economy unfolds.            
New applications for US jobless benefits rose slightly more than expected last week, but a drop in the number of Americans on unemployment rolls to a 17-year low suggested the labour market continues to tighten.              
Higher rates could dent the demand for non-interest-paying gold. "From a chart perspective, gold appears to have run out of momentum, having made a series of lower highs over the past few days," said Jeffrey Halley, senior market analyst, OANDA.
"Assuming the weekend passes without surprises election-wise, there is potential for a correction on Monday as safe-haven hedges are lightened."
Holdings of 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 an 11.8 tonnes rise on Wednesday, the biggest one-day inflow since September.
"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.
Spot silver declined 0.3 percent to $17.94, extending losses into the fifth session. Silver has fallen about 3 percent so far this week.
Platinum slipped 0.5 percent to $972.10, while palladium fell 0.3 percent to $797.50, after rising over 3 percent in the previous session.
 

• Gold and Forex