May 25, 2018 / 6:09 PM / a month ago

PRECIOUS-Gold dips slightly as Trump says North Korea talks may continue

    * Dollar rises to new 2018 high, pressuring gold
    * Gold prices likely to move lower -analyst

 (Recasts; updates prices, changes headline; adds comment,
second byline, NEW YORK to dateline)
    By Renita D. Young and Peter Hobson
    NEW YORK/LONDON, May 25 (Reuters) - Gold prices dropped
slightly on Friday, but still remained above  $1,300 per ounce
as investors digested news of U.S. President Donald Trump saying
a meeting with North Korea's leader could still go ahead.
    Spot gold        lost 0.1 percent at $1,303.34 per ounce by
1:38 p.m. EDT (1738 GMT), yet was on track for a weekly gain of
0.9 percent, its biggest since March. Spot gold earlier hit a
10-day high at $1,307.80.
    U.S. gold futures         for June delivery settled down 70
cents, or 0.1 percent, at $1,303.70 per ounce. 
    "Gold has managed to hold onto a significant chunk of its
gains made yesterday despite the U.S. trading conciliatory
messages with North Korea again, something which has boosted the
global stock markets and the U.S. dollar," said Forex.com
analyst Fawad Razaqzada.
    Julius Baer analyst Carsten Menke said the uncertainty over
the U.S.-North Korea meeting was likely to have only a temporary
impact on gold, traditionally used as a safe place to park
assets in times of instability.
    "Based on this pattern and on gold's very tight relationship
with the U.S. dollar, this uplift in price should be temporary
and we should fall back below $1,300 an ounce," he said. 
    Dollar-priced gold tends to increase when the greenback
weakens because this makes it cheaper for buyers with other
currencies. 
    The dollar reached a new 2018 high, helped by North Korea
saying it was open to resolving issues with the United States.
                          . On Thursday, gold rallied above
$1,300 an ounce after Trump said the meeting with North Korea
was off. 
    Global shares also steadied, reducing the clamor for gold as
a safer asset.            
    Heading into a long holiday weekend in the United States,
Dillon Gage's Walter Pehowich said trading activity was
virtually mute.
    "I expect gold to stay between $1,300 and $1,308 for the
weekend."
    Investors focused on the psychologically important $1,300
level, MKS trader Samuel Laughlin said, "as a pivot point for
near-term price action."
    Gold had been trading in a range between about $1,310 and
$1,360 since hitting a 1-1/2 year high in January but was pushed
lower this month by a strengthening dollar and rising U.S. bond
yields, which reduce the appeal of non-yielding gold.       
     
    Meanwhile, silver        lost 0.6 percent at $16.53 per
ounce, headed for a weekly gain of 0.4 percent. It earlier hit
$16.70, a 1-1/2-week high.
    Platinum        dropped 1.4 percent at $896 per ounce, but
up 1.9 percent on the week, while palladium        declined 0.3
percent at $977.15, set for a 1.7 percent weekly gain.

 (Additional reporting by Apeksha Nair and Karen Rodrigues in
Bengaluru
Editing by David Goodman, Edmund Blair and Diane Craft)
  
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