Gold Price Falls On Dollar Strength, Easing North Korea Tensions
Bengaluru: Gold prices fell on Wednesday as the dollar advanced towards more than three-month highs and on easing concerns over North Korea and a Sino-US trade war, but found some support from sliding stock markets.
Spot gold was down 0.1 per cent at $1,329.04 per ounce at 0335 GMT (9:05 am in India). The yellow metal rose 0.5 per cent on Tuesday to break a three-session losing streak.
US gold futures eased 0.2 per cent to $1,330.60 per ounce.
"As traders put geopolitical and trade risk in the rear-view mirror for the time being, how the dollar flourishes and wilts will be the primary driver of near-term gold sentiment," said Stephen Innes, APAC trading head at OANDA.
The dollar index, which measures the greenback against a basket of currencies, was up 0.1 per cent at 90.816, just below 91.076 hit in the previous session, its strongest level since January 12.
"I think that the downward trend (in gold prices) will continue for the next few days..." ahead of a meeting between leaders of North Korea and the South, said Ji Ming, chief analyst at Shandong Gold Group.
North Korean leader Kim Jong Un is due to hold a summit with South Korean President Moon Jae-In on Friday, and is expected to meet with US President Donald Trump in late May or early June.
Mr Trump said on Tuesday the United States would likely reach a trade agreement with China and that officials from both sides would sit down for negotiations in a few days.
Gold was, however, supported by falling equity markets as a rise in US bond yields and warnings from bellwether US companies of higher costs drove fears that corporate earnings growth may peak soon.
"When the equity walls come crumbling down, gold offers the best support," Mr Innes said.
Gold is often seen as an alternative investment during times of political and financial uncertainty.
In other precious metals, platinum was down 0.1 per cent at $925.24 an ounce.
Palladium fell for a third straight session, down 0.5 per cent at $969.75 an ounce.
Spot silver dropped 0.2 per cent to $16.68 an ounce.
The price of silver will depend heavily on trends in investment demand in 2018, but could get a boost from international political and economic risk purchases, CPM Group said on Tuesday.
