Gold price draws modest bid as China, North Korea uncertainty bubbles up
New York (May 23) Gold futures advanced modestly Wednesday as the metal drew a slight bid alongside other haven assets as global market attention returned to Sino-U.S. trade relations and concerns over the fate of nuclear negotiations with North Korea.
June gold GCM8, +0.35% climbed $3.70, or about 0.3%, to $1,295.70 an ounce. That’s nearly $15 up from the $1,281.20 it grazed at one point Monday, the lowest intraday level since December.
“There have been some sharp moves in the markets [early Wednesday] with global stock indices, Turkish Lira, euro and pound all tumbling and safe haven yen, Swiss franc and, to a lesser degree, gold all rallying,” said Fawad Razaqzada, market analyst at Forex.com.
“Sentiment has turned sour for a variety of reasons, but among the main culprits have been the ongoing selloff in Italian assets amid the political turbulence in the nation and after U.S. President Donald Trump cast doubt over the North Korea-U.S. summit taking place in June,” he said.
Trump said late Tuesday there is a “very substantial chance” the historic meeting between him and North Korea’s leader Kim Jong Un won’t happen in June as planned unless Pyongyang meets certain conditions.
Separately, Trump said he was “not satisfied” with the latest round of trade talks with China. Signs of an easing in tensions between the world’s two largest economies has spurred risk-on moves in financial markets earlier this week, with stocks rallying and bonds selling off.
Despite the modest gain this week, gold has actually shown little reaction to the swirling geopolitical tensions. Focus in the gold market has largely remained on overall strength in the dollar and the U.S.-favored interest-rate differential over other economic powerhouses. At 2 p.m. Eastern Time, attentions turns to minutes from the Federal Reserve’s May 1-2 meeting, which will likely to scrutinized for any signals within those notes for the likelihood of a rate increase next month and beyond.
The benchmark index DXY, +0.44% for the dollar rose but was limited by the greenback’s decline against the haven yen. The U.S. currency remains near its highest levels of the year. Moves in the dollar can influence gold because the precious metal is traded in the greenback.
The 10-year Treasury note yield TMUBMUSD10Y, -1.68% fell 5 basis points to 3.012%, pulling further away from the seven-year intraday high of 3.125% reached last Friday. The higher yield can dull the appeal of nonyielding bullion.
In other trading, July silver SIN8, -0.09% fell 4 cents, or 0.2% to $16.535 an ounce. July copper HGN8, -2.28% was down 2.2% at $3.064 a pound, July platinum PLN8, -0.15% was little changed at $908.30 an ounce and June palladium PAM8, -1.25% traded at $981.10 an ounce, down 0.6%.
Among exchange-traded funds, the SPDR Gold Shares GLD, -0.06% edged up 0.4%, while the iShares Silver Trust SLV, +0.26% was up 0.1% and the VanEck Vectors Gold Miners ETF GDX, -0.58% slipped 0.4%.
MarketWatch
