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.

Reuters May 29, 2018 00:05:10 IST
Gold falls on dollar gains, prospects for U.S.-North Korea summit

Gold falls on dollar gains prospects for USNorth 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. 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.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.