(Updates prices)
* Palladium hits all-time peak of $2,106/oz
* Silver eases from four-month high
By Karthika Suresh Namboothiri
Jan 8 (Reuters) - Gold shed over 1% after vaulting above the
$1,600 level for the first time in nearly seven years on
Wednesday after remarks by U.S. President Donald Trump eased
fears of a larger conflict with Iran.
Spot gold XAU= dropped nearly 1% to $1,559.22 per ounce as
of 1:32 p.m. ET (1834 GMT). Prices had earlier soared to
$1,610.90 in the session, their highest level since March 2013.
U.S. gold futures GCcv1 settled 0.9% lower at $1,560.20.
Trump said Iranian missile strikes on bases in Iraq had not
harmed any U.S. troops, and that Tehran appeared to be standing
down. Earlier in the session gold jumped as much as 2.4% after
Iran retaliated to a U.S. drone strike that killed an Iranian
military commander last week. The U.S. attack led to fears of a
new war in the Middle East.
"Expectations are that we're not going to see a war, so you
might see some softness. The rest of the catalysts remain in
place for gold," said Edward Moya, a senior market analyst at
OANDA.
"We could see some weakness down to $1,550, but in the end
we are likely to see prices continue to march higher to $1,640
in the short term."
However, with no casualties after the strike and tweets from
Iranian officials stating that Tehran did not want a war and
that its strikes "concluded" its response to Friday's killing,
concerns of conflict in the region ebbed, dampening demand for
safe-haven gold.
Gold is a preferred asset during times of political and
economic uncertainty.
"Although the hostilities seem to be over - at least for now
- the situation could easily re-escalate in fairly short order,"
said Edward Meir, analyst at ED&F Man Capital Markets.
The geopolitical and economic drivers which impacted gold
prices in 2019 - including U.S.-China trade tensions, Brexit and
the U.S. Federal Reserve's monetary policy - would continue into
2020, the World Gold Council said in a note.
Investors also kept a close eye on economic data from the
United States. Data showed U.S. private payrolls surged in
December, weighing on the metal. Meanwhile, palladium XPD= extended its rally, undaunted by
most market events driving other precious metals. Prices were up
2.6% at $2,104.95, close to the all-time high of $2,108.81
notched earlier in the session.
Platinum XPT= eased 1.4% to $957.02 an ounce, while silver
XAG= shed 1.3% to $18.15. Silver prices had earlier notched a
four-month high of $18.85.
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Gold eases off $1,600/oz peak https://tmsnrt.rs/39P4SBd
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