Gold edges higher, but vulnerable on Korea
Gold edged higher yesterday, but was likely to revisit five-week lows after the prospect for a Korean denuclearisation deal eroded bullion’s safe haven appeal.
The leaders of South and North Korea embraced after pledging yesterday to work for the “complete denuclearisation of the Korean peninsula”. Spot gold was up 0.1 per cent at $1,318 (Dh4,837) per ounce at 1015 GMT, not far from a low of $1,315.06 an ounce hit in the previous session, its weakest since March 21. Spot gold was on track to fall more than 1 per cent this week, its second consecutive weekly decline and the biggest weekly drop in four.
US gold futures also added 0.1 per cent to $1,318.90 per ounce. “We have the pictures from the meeting of the two Korean leaders today, showing geopolitical hotspots have calmed down massively, so there’s scant argument to be bullish on gold,” said Carsten Fritsch, commodity analyst at Commerzbank.
The dollar was firmer, bond yields are higher and spot gold slipped below its 100-day moving average, he said. “That’s a very negative sign for technical oriented investors ... I expect gold to briefly dip below $1,300, but physical buying will kick to support the price.”