NEW YORK (Scrap Register): Gold prices are headed for their first weekly loss in three week as global political tensions wane and the U.S. dollar rises amid improving risk sentiment, said commodities brokerage SP Angel.
The most active June gold contract on the COMEX division of the New York Mercantile Exchange fell by $10.50 to $1,338.30 an ounce on Friday.
Gold prices fell Friday to post a loss of 0.7% for the week, their first such loss in three weeks. Strength in the U.S. dollar and Treasury yields dulled investor demand for the precious metal.
As of a research note, the Bloomberg dollar spot index was up 0.6% this week, keeping pressure on gold and prompting some traders to take profits.
The U.S. economy has remained on steady growth, which has assured the Fed it should stick with its current pace of rate increases. Political risks have slightly faded as U.S. President Donald Trump said he hoped a summit with North Korean leader Kim Jung Un would be successful following CIA Director Mike Pompeo’s surprise arrival in country.
The summit also hopes to build on North Korea’s expressed commitment to ‘complete denuclearization’ of the Korean peninsula. Further, the U.S. did not make new demands on trade following a summit with Japanese Prime Minister Shinzo Abe.
However, gold remains a ‘value’ buy as uncertainties remain over U.S. monetary policy direction, unanswered geopolitical tensions and underlying trade protectionism threats.