June 9, 2017 / 3:06 AM / in 5 months

PRECIOUS-Gold falls on dollar strength amid UK vote uncertainty

    * Gold heading for first weekly fall in five
    * Palladium hits highest since September 2014

 (Updates prices)
    By Vijaykumar Vedala and Koustav Samanta
    BENGALURU, June 9 (Reuters) - Gold fell for a third day on
Friday as the dollar firmed after the UK national election left
no single party with a claim to power though most investors
seemed to shrug off the uncertainty.   
    With the majority of seats counted, incumbent Prime Minister
Theresa May's Conservative Party had no way to win an outright
majority in parliament. She had called the election to gain a
stronger mandate before launching into arduous divorce talks
with the European Union.                                     
    "The poll verdict could create mild risk aversion which
should be mildly supportive for gold; but depends on what sort
of negotiations take place between the EU and UK (over Brexit),"
NAB analyst John Sharma said. 
    "For now, looks like the market has taken this in its
stride." 
    Spot gold        was down 0.4 percent at $1,273.81 per
ounce, as of 0816 GMT. The yellow metal has fallen 0.4 percent
for the week, and is poised for its first weekly drop in five. 
    U.S. gold futures         for August delivery were 0.2
percent lower at $1,276.40.
    Dollar-denominated gold typically falls in value when the
greenback gains. 
    Earlier in the day, gold was pressured by events in the
United States, including former Federal Bureau of Investigation
(FBI) director James Comey's Congressional testimony and
improving economic data.
    Comey accused President Donald Trump of firing him to try to
undermine the FBI's investigation of possible collusion by his
campaign team with Russia's alleged efforts to influence the
2016 U.S. presidential election.              
    However, his statement was seen containing no major
surprises.        
    Meanwhile, the number of Americans filing for unemployment
benefits fell last week, unwinding half of the prior period's
jump and suggesting the labor market was tightening despite a
recent slowdown in job growth.             
    "Looking at the developments in the UK and in the U.S. as
well as at the recent ECB meeting, we think of these as business
as usual," said Joshua Rotbart, managing partner, J. Rotbart &
Co in Hong Kong.
    "The road is bumpy and the price follows, but assuming no
major armed conflict in sight, or any other developments that
may result in an impeachment process of President Trump, we
believe prices will bounce back and forth in response to
performances of other assets classes."    
    The dollar index, which measures the greenback against a
basket of major currencies, was up 0.5 percent at 97.427.       
    Among other precious metals, palladium        climbed as
much as $864.50 an ounce, its highest since September 2014.
    Silver        slipped 0.5 percent to $17.29 per ounce, while
platinum        edged 0.3 percent higher to $934.74.      
              

    
 (Reporting by Vijaykumar Vedala and Koustav Samanta in
Bengaluru; Editing by Christian Schmollinger and Sherry
Jacob-Phillips)
  

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