Gold prices tumbled on Monday, May 28, for a second session 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.
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.
Spot gold slipped by 0.3 percent to $1,297.85 an ounce by 1019 GMT, while U.S. gold futures for June
delivery were down 0.5 percent at $1,297.30.
Trading volumes were low with New York and London markets closed for public holidays.
Demand for gold as a safe-haven investment was also dented as Italy’s anti-establishment 5-Star and League parties abandoned plans to form a government hostile to the European single currency, triggering a rally in the euro.
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 to 2018 highs, making bullion more expensive for buyers using other currencies.
Speculative bets on higher prices have fallen sharply, with funds’ net long position in COMEX gold falling to its lowest level 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.
In other precious metals, spot silver was down 0.2 percent at $16.44 an ounce. Speculative investors have become less pessimistic about prices, with data on Friday showing their net short position in
COMEX sliver at its lowest since February 2014. Platinum was up 0.4 percent at $900.50 while
palladium firmed by 0.1 percent to $980.30, Reuters reports.
