Gold falls on dollar gains, prospects for U.S.-North Korea summit
By Nicole Mordant and Peter Hobson VANCOUVER/LONDON (Reuters) - Gold prices fell for a second session on Monday as the U.S. dollar firmed and after U.S.
By Nicole Mordant and Peter Hobson
VANCOUVER/LONDON (Reuters) - Gold prices fell for a second session on Monday as the U.S. dollar firmed and after U.S. President Donald Trump revived hopes that he would meet North Korean leader Kim Jong Un next month, lowering political tensions and demand for gold as a safe-haven investment.
The dollar strengthened to a 2018 high, pressuring gold by making it more expensive for buyers holding other currencies.
Spot gold slipped 0.3 percent to $1,297.70 an ounce by 1:25 EDT (1725 GMT), while U.S. gold futures for June delivery were down 0.4 percent at $1,298.20.
Trading volumes were low, with New York and London markets closed for public holidays.
"We've migrated lower from just north of $1,300 towards the end of the week. The U.S. dollar jumped a little ... as the Canadian dollar and euro fell off here," said TD Securities head of commodity strategy Bart Melek.
Trump last week pulled out of the June 12 summit, pushing gold above $1,300 an ounce, but then reversed his decision and said on Sunday that a U.S. team had arrived in North Korea to prepare.
"It looks like there is some chance of a meeting between the U.S. and North Korean leaders that would lower geopolitical risks and lessen the appeal of gold," said National Australia Bank economist John Sharma.
Gold is traditionally used as a safe place to store assets during times of uncertainty.
Gold had been trading between about $1,310 and $1,360 since hitting a 1-1/2-year high in January, but it was pushed lower this month as the dollar strengthened.
More weakness could be in the offing, Melek said, on expectations that the Federal Reserve would proceed with lifting benchmark U.S. interest rates this year.
Higher rates typically weigh on gold as they increase the opportunity cost of holding non-yielding assets such as bullion.
Speculative bets on higher prices have fallen sharply, with funds' net long position in COMEX gold falling to its lowest in 10 months.
Prices are now trapped between gold's 200-day moving average at $1,307 and Fibonacci support at $1,286, said Saxo Bank analyst Ole Hansen.
"The potential for fireworks is biggest on the upside given the sharp reduction we have seen in speculative longs," he said. "If we do break higher, the funds will have to chase the market to rebuild their long positions."
In other precious metals, spot silver was down 0.05 percent at $16.47 an ounce.
Speculative investors have become less pessimistic about prices, with data on Friday showing their net short position in COMEX silver at its lowest since February 2014.
Platinum was up 0.6 percent at $902 while palladium had gained 0.5 percent to $984.50.
(Additional reporting by Swati Verma in Bengaluru; Editing by Edmund Blair and James Dalgleish)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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