* Gold on track for first weekly drop in six
* Investors cautious ahead of French election on Sunday
* Silver falls for 5th session, heads for worst week in over
(Adds quotes, updates prices, adds LONDON dateline)
By Eric OnstadLONDON, April 21 (Reuters) - Gold prices treaded water on
Friday as investors awaited the outcome of weekend French
elections and possible announcements about tax cuts in the
Spot gold <XAU=> was up 0.1 percent at $1,282.59 per ounce
at 1050 GMT, on track for its first weekly drop in six.
U.S. gold futures <GCcv1> also added 0.1 percent to
"The big news over the weekend will be the French election
and the market will be to an extent on hold ahead of that," said
Mitsubishi commodities analyst Jonathan Butler.
There was the potential for safe-haven buying of gold after
France said its security forces were fully mobilised for a
presidential election at the weekend after the killing of a
policeman by an Islamist militant. [nL8N1HT0KY]
"Into the near term, if the geopolitical tensions intensify,
there is a chance that gold prices will reach $1,300 or more,"
OCBC analyst Barnabas Gan said.
Moving above $1,290/91 would be significant as it would
break above a downtrend that has been in place since gold
touched an all-time high of $1,920.30 in 2011, Butler said.
Investors will be keeping a close eye on events in the
United States, he added.
"Over next week or so, I think we'll start to see whether
the reflation trade is back on, which might be backed up by some
announcements from the U.S. administration on tax reform."
The Trump administration will unveil a tax reform plan very
soon and expects it will be approved by Congress this year
whether a healthcare overhaul happens or not, Treasury Secretary
Steven Mnuchin said on Thursday. [nL1N1HS1IU]
Gold is at risk of some profit taking after its strong
recent run, but should be supported by other factors, analysts
"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.
SPDR Gold Trust <GLD>, 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 a 11.8-tonne
increase on Wednesday, the biggest one-day inflow since
Spot silver <XAG=> declined 0.2 percent to $17.96, extending
losses into the fifth session. Silver has shed about 3 percent
so far this week.
Platinum <XPT=> slipped 0.1 percent to $976.50, while
palladium <XPD=> was flat at $800 after rising over 3 percent in
the previous session.
(Additional reporting by Nallur Sethuraman in BENGALURU,
editing by David Evans)
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Keywords: GLOBAL PRECIOUS/ (UPDATE 3)