London — Gold prices steadied on Friday after breaking above $1,300/oz in the previous session when US President Donald Trump called off a meeting with North Korean leader Kim Jong-un, fanning political tension.
Spot gold was flat at $1,304.84/oz at 9.44am GMT but on track to end the week up 1% for its biggest weekly gain since March. US gold futures for June delivery were also unchanged at $1,304.40.
Gold was traditionally used as a safe place to park assets in times of uncertainty, but Trump’s decision would have limited effect on prices, said Julius Baer analyst Carsten Menke. “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 US dollar, this uplift in price should be temporary and we should fall back below $1,300/oz.”
Gold tends to move higher when the US dollar weakens because this makes dollar-priced bullion cheaper for buyers with other currencies. After losing ground on Thursday the dollar strengthened with support from a North Korean statement that it was open to resolving issues with the US. Global shares also regained some lost ground after Pyongyang’s measured response to Trump’s announcement, 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/oz 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 one-and-a-half-year high in January.
In other precious metals, silver was up 0.1% at $16.64/oz, on track for a weekly gain of 1.3%.
Platinum was 0.3% down at $906.24, up 2.7% on the week, while palladium was flat at $974.55 but set to finish with a weekly gain of 1.2%.