May 25, 2018 / 10:03 AM / 6 months ago

PRECIOUS-Gold steadies as Trump says North Korea talks may still go ahead

    * Spot gold up 0.9 percent on the week
    * Dollar rises to new 2018 high, pressuring gold
    * Prices likely to move lower -analyst

 (Updates prices)
    By Peter Hobson
    LONDON, May 25 (Reuters) - Gold prices steadied on Friday
after Donald Trump said a meeting with North Korea's leader
could still go ahead, easing concerns that had driven gold above
$1,300 an ounce the previous session when the U.S. president
said the meeting was off.
    Spot gold        was down 0.1 percent at $1,303.3 an ounce
at 1446 GMT and on track for a weekly gain of 0.9 percent, its
biggest since March. 
    U.S. gold futures         for June delivery were also 0.1
percent lower at $1,302.60.
    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.
    "This is pretty typical for these kinds of geopolitical
jitters. Very short-term sharp reaction, then a lack of follow
through, given that this basically does not have any implication
for the global economy or financial markets," he said. 
    "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." 
    Gold tends to move higher when the U.S. dollar weakens
because this makes dollar-priced bullion cheaper for buyers with
other currencies. 
    But after losing ground on Thursday the dollar strengthened
to a new 2018 high, helped by a North Korean statement that it
was open to resolving issues with the United States, comments
that were welcomed by Trump.                           
    Global shares also steadied, reducing the clamour for gold
as a safer asset.            
    On the technical side, resistance was at gold's 200-day
moving average around $1,307, with Fibonacci support at
$1,286.80, ScotiaMocatta analysts said. 
    Investors were focused on the psychologically important
$1,300 level, MKS trader Samuel Laughlin said. "We look to
(this) key level as a pivot point for near-term price action,"
he said.
    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.       
     
    In other precious metals, silver        was down 0.9 percent
at $16.48 an ounce, on track for a weekly gain of 0.4 percent. 
    Platinum        was 0.8 percent lower at $901.70, up 2.1
percent on the week, while palladium        was down 0.4 percent
at $970.50 and set for a weekly gain of 0.8 percent. 
    

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