Gold treads water as market focus turns to G-7 meeting

Bengaluru — Gold prices held steady on Friday as investors remained cautious ahead of a Group of Seven (G-7) meeting starting later in the day and other key events next week such as a US Federal Reserve policy meeting and a US-North Korea summit.

Spot gold was steady at $1,296.36/oz by 4.15am GMT. It hit a one-week high of $1,303.08/oz in the previous session and has risen about 0.3% for the week so far.

US gold futures for August delivery fell 0.2% to $1,300.40/oz.

“Gold is most likely going to be range-bound. The markets are looking very closely on what could actually come out from the G-7 meeting,” said OCBC analyst Barnabas Gan.

Leaders of the Group of Seven rich nations headed for a summit in Canada on Thursday more divided than at any time in the group’s 42-year history, as US President Donald Trump’s “America First” policies risk causing a global trade war and deep diplomatic schisms.

Trump is set to meet North Korean leader Kim Jong-un on June 12 in Singapore, and the US Federal Reserve’s Federal open market committee (FOMC) starts its two-day meeting on interest rates on the same day.

The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to a further tightening in labour market conditions and strengthening prospects of an interest rate hike.

“The market is also looking for a potential rate hike by the FOMC … [but] the dollar movement will dictate how gold will move into the next one week or so,” Gan said.

Gold is highly sensitive to rising US rates as these tend to boost the dollar, putting pressure on greenback-denominated, non-yielding bullion.

The dollar index, which measures the greenback against a basket of six major currencies, was up 0.1% at 93.458. It fell to a three-week low in the previous session.

In other precious metals, spot silver fell 0.1% to $16.64/oz, after marking a more than six-week high on Thursday. It was heading for a nearly 2% rise this week, its biggest in seven weeks.

Palladium was little changed at $1,012/oz. It had also risen to an over 6-week high in the previous session and was on course for its third consecutive weekly gain this week, up more than 1% so far.

Platinum was down 0.3% at $894.20/oz and was on course for a small weekly decline.

Reuters