Gold price hits near 6-week low as dollar firms, Korea fears ebb

London (Apr 30)  Gold fell to its lowest in nearly six weeks on Monday as easing tensions on the Korean peninsula helped boost appetite for assets seen as higher risk, such as stocks, and lifted the dollar.

The metal slid 1 percent last week on the back of a stronger dollar and a rise in Treasury yields to above 3 percent, which weighed on interest in non-interest bearing assets.

Its retreat has left it on track to end April down 0.5 percent, erasing all the previous month's gains.

Spot gold was down 0.6 percent at $1,313.91 an ounceby 1130 GMT, off an earlier low of $1,313.51, its weakest since March 13. U.S. gold futures for June delivery were 0.7

percent lower at $1,314.60 an ounce.

    "Easing geopolitical concerns and the strengthening dollar

index are the factors which are creating the sell-off," Naeem

Aslam, chief markets analyst at Think Markets, said.

    "We are looking at two important support levels - $1,307

followed by $1,300," he said. "A break of these levels would

bring more selling pressure."

    At their summit on Friday, North Korean leader Kim Jong Un

and South Korean President Moon Jae-in declared they would take

steps to formally end the 1950-53 Korean War, which ended only

with a truce, and work towards the "denuclearisation" of the

Korean peninsula.            

    The dollar index was up 0.3 percent on Monday, holding just

below its strongest since mid-January, while European shares

rose after a positive session among Asian stocks overnight as

tensions on the Korean peninsula eased.                  

    Hedge funds and money managers cut their net long position

in COMEX gold contracts and switched to a net long position in

silver contracts in the week to April 24, U.S. Commodity Futures

Trading Commission data showed on Friday.            

    "After nine consecutive weeks of a rare and even record net

short silver position for money managers, the latest data shows

that for the week ending Tuesday 24 the funds have returned to a

slight net long," ING said in a note.

    "Prices had briefly rallied above $17/oz but failed to hold

as gold prices also fell. The gold/silver ratio has since

recovered back above 80x since briefly hitting lows of 78x."

    Among other precious metals, silver was down 0.8

percent at $16.36 an ounce, off an earlier three-week low of

$16.34. Platinum was down 1 percent at $901.49 an ounce

and palladium was 0.6 percent lower at $967.75.