Gold prices went down during a second session on the 28th of May, 2018, falling alongside the Euro and the Canadian dollar, unpleasant news for sellers and people dealing with currency exchange Montreal and in Europe. However, the US$ saw some growth after US President Donald Trump stated that he would be meeting again with North Korean leader Kim Jong Un in June, which lowered political tensions and, consequently, demand for gold as a safe investment.
The US$ went up, hitting its best numbers for the year 2018, applying pressure on the gold trade by making gold pricier to buy for those using other currencies for their transactions. This pressure led to gold dropping in prices, with spot gold going down by 0.3% to $1,297.70/ounce by the session’s close at 17:25 GMT/1:25 EDT. Meanwhile, US gold futures for June delivery dropped to $1,298.20, a rate of 0.4%.
Trading volumes were also quite low, thanks to the New York and the London gold markets being closed for public holidays.
Head of Commodity Strategy, Bart Melek, says that the market has dropped a bit, from just above $1,300 to current figures towards the end of the 4th week of May. The US$ moved up a bit, but currency exchange Montreal and Europe took a bit of a hit as the Canadian dollar and the Euro went down a little.
President Trump pulled out of the June 12 summit with the two Koreas, which lead to the gold market going above $1,300/ounce, but he has since reconsidered his decision, announcing on May 27, Sunday, that a US team had landed on North Korea as preparation for the talks.
Economist John Sharma, National Australia Bank, says that the chance of North Korea and the US sitting down to talk would lower geopolitical tension, and, as a result, lower the appeal of gold. This is due to the face that gold is traditionally used as a safety commodity for assets in times of notable uncertainty.
Gold pricing was sitting at about $1,310 and $1,360 since January, but prices dropped in May as the dollar went up in value. Melek says that more reduction could come in the future, as many are expecting the Federal Reserve to lift benchmark US interest rates.