Gold price slips on news of North Korea meeting with the US
London (Mar 9) Gold prices edged down on Friday after the potential for easing tensions with North Korea sapped safe-haven demand ahead of a US labour market report that could support more increases to interest rates.
US President Donald Trump said he was prepared to meet North Korea’s Kim Jong-un in what would be the first face-to-face encounter between the countries’ leaders and could mark a breakthrough in a stand-off over the North’s nuclear weapons.
"If, with this news, the tension with North Korea is easing, it’s something that is, maybe not headwinds, but a mild breeze against gold," said Norbert Rücker, head of commodity research at Julius Baer in Zurich. The reaction has been muted because gold had failed to show strong safe-haven demand last year during months of insults exchanged over the North’s nuclear and missile programmes, he added.
Spot gold was down 0.2% at $1,319.85 an ounce by 11.00am GMT and on track for a third consecutive weekly decline. US gold futures for April delivery fell 0.1% to $1,320.40.
The dollar jumped0.5% against the yen and edged up against a basket of currencies, making gold more expensive for buyers using other currencies. The US dollar had tumbled to 16-month lows against the safe-haven yen late last week as fears of a trade war rattled markets after Trump announced his plan for imposing tariffs on imported steel and aluminium.
Investors were waiting for the release of US jobs data later on Friday.
"The bigger event for the gold market is later today, with the labour market report, since we’ve had more hawkish comments of late. We expect four US rate hikes this year and this should really be something that supports the dollar and causes gold weakness," Rücker said.
Julius Baer expects gold to fall to $1,225 in three months, he added. Spot gold could fall more into a range of $1,307 to $1,312 after piercing support at $1,317, said Reuters technical analyst Wang Tao. "I think today the market might get a little short, feeling that we will have good numbers and that risk is on," one Hong Kong-based trader said.
In other precious metals, silver slipped 0.3% to $16.45 an ounce, platinum eased by 0.1% to $951.30 and palladium was down 0.1% at $976.
Reuters
