Gold Prices Fall on Easing Geopolitical Tensions

London (May 28)  Gold prices were lower for the second consecutive session on Monday, falling further below the $1,300 level amid waning safe haven demand on the back of easing geopolitical tensions.

Gold futures for June delivery on the Comex division of the New York Mercantile Exchange were down $7.40 or 0.56% to $1,296.40 a troy ounce by 05:03 AM ET (09:03 AM GMT), not far from an overnight low of $1,294.70.

Risk appetite was boosted after U.S. President Donald Trump said on Sunday that a U.S. team had entered North Korea to prepare for a proposed summit between him and North Korean leader Kim Jong Un, despite question marks hanging over the talks.

Elsewhere, Italy’s populist parties abandoned their bid to form a coalition government after the country’s President Sergio Mattarella blocked the nomination of a euro sceptic finance minister.

Investors had feared that the coalition could endanger Italy’s membership in the euro zone.

Geopolitical tensions tend to boost gold, which is regarded as a safe-haven asset during periods of uncertainty.

Gold’s losses were held in check by the weaker dollar. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.15% at 94.07, pressured lower by the stronger euro.

A weaker U.S. currency makes dollar denominated gold less expensive for overseas buyers.

In other metals trading, July silver futures were down 0.46% at $16.46 a troy ounce, while July platinum futures were up 0.42% to $905.10. July copper futures were off 1.19% at $3.040 a pound.

Investing.com