Gold steadies as Trump teases idea of North Korea summit being back on
London — Gold prices steadied on Friday after US President Donald Trump said a meeting with North Korea’s leader could still go ahead, easing concerns that had driven gold above $1,300 an ounce the previous session when the US president said the meeting was off.
Spot gold was down 0.1% at $1,303.3 an ounce at 2.46pm GMT and on track for a weekly gain of 0.9%, its biggest since March. US gold futures for June delivery were also 0.1% lower at $1,302.60.
Julius Bär analyst Carsten Menke said the uncertainty over the US-North Korea meeting was likely to have only a temporary impact on gold, traditionally used as a safe place to park assets in times of instability.
"This is pretty typical for these kinds of geopolitical jitters. Very short-term, sharp reaction, then a lack of follow through, given that this basically does not have any implication for the global economy or financial markets," he said. "Based on this pattern and on gold’s very tight relationship with the dollar, this uplift in price should be temporary and we should fall back below $1,300 an ounce."
Gold tends to move higher when the dollar weakens because it makes dollar-priced bullion cheaper for buyers with other currencies. But after losing ground on Thursday the dollar strengthened to a new 2018 high, helped by a North Korean statement that it was open to resolving issues with the US, comments that were welcomed by Trump.
Global shares also steadied, reducing the clamour for gold as a safer asset. On the technical side, resistance was at gold’s 200-day moving average of about $1,307, with Fibonacci support at $1,286.80, ScotiaMocatta analysts said. Investors were focused on the psychologically important $1,300 level, MKS trader Samuel Laughlin said. "We look to [this] key level as a pivot point for near-term price action."
Gold had been trading in a range between about $1,310 and $1,360 since hitting a one-and-a-half-year high in January, but was pushed lower this month by a strengthening dollar and rising US bond yields, which reduce the appeal of non-yielding gold.
In other precious metals, silver was down 0.9% at $16.48 an ounce, on track for a weekly gain of 0.4%. Platinum was 0.8% lower at $901.70, up 2.1% on the week, while palladium was down 0.4% at $970.50 and set for a weekly gain of 0.8%.