LONDON, April 17 (Reuters) - Gold fell on Tuesday as sharper
appetite for risk benefited cyclical assets at bullion's
expense, with the dollar's recovery from three-week lows versus
the euro adding to pressure on the metal.
Gold rallied to a 2-1/2 month high last week as heightened
tensions over Syria and U.S. sanctions on Russia sparked a drop
in equities and ratcheted up interest in nominally defensive
assets. Those gains, however, have proved hard to maintain.
Spot gold was down 0.4 percent at $1,341.23 an ounce
at 1350 GMT, while U.S. gold futures were down 0.5
percent at $1,343.80.
"All this noise we've been witnessing as of late, whether it
is trade disputes or Syria, has not really moved gold on a
sustainable basis," Julius Baer analyst Carsten Menke said.
"The story would be different if these disputes prevailed
and we got a significant slowdown in leading indicators. But it
doesn't seem to me that anybody is really afraid of a material
deterioration in the economic backdrop."
A gradual return of risk appetite lifted world shares on
Tuesday, with European stocks climbing 0.6 percent and Wall
Street stocks opening higher after strong earnings from Netflix,
Goldman Sachs and health majors.
The U.S. yield curve reached its flattest in more than a
decade on Monday after the White House said U.S. President Trump
would nominate Richard Clarida as Federal Reserve Vice Chairman,
another hawkish voice at the central bank.
A flatter yield curve typically indicates that the Fed is
planning to lift interest rates in the near term and is often
understood to signal concern over the macroeconomic outlook.
Higher rates tend to weigh on non-yielding bullion.
The dollar recovered to trade up 0.2 percent versus the euro
meanwhile, after the single currency hit a three-week high in
earlier trade.
Among other precious metals, silver was up 0.6
percent at $16.70 an ounce, while platinum was 0.4
percent higher at $930.50.
Palladium was up 0.1 percent at $1,002.80 an ounce,
recovering from an earlier low of $980.75. The metal hit its
strongest since March 1 on Monday at $1,012.10 an ounce.
It rallied nearly 10 percent last week, the biggest weekly
gain since January 2017, on fears that U.S. sanctions on Russia
could hurt supply of the autocatalyst metal.
"Palladium has managed to reclaim the 200-day moving average
and recent graphical levels at $973/963 and also breached the
down channel that framed the correction since last January,"
Societe Generale said in a note on technicals.
"$1,017 and $1,028, the two-year channel limit and the 76.4
percent retracement of the last bout of down-move, are immediate
resistance levels."
