Gold Prices Drop On Stronger Dollar Amid Trump-Kim Summit

04:45' PM - Tuesday, 12/06/2018

Gold prices took a dip on Tuesday amid expectations for a positive outcome from the summit between U.S. President Donald Trump and North Korean leader Kim Jong Un.

Gold futures for August delivery on the Comex division of the New York Mercantile Exchange were down $2.40 or 0.18%, to $1,300.90 a troy ounce by 12:45PM ET.

The Trump-Kim meeting started at around 09:00PM ET (01:00GMT) in Singapore. The market is generally looking forward to some positive outcomes on denuclearization on the North Korea Peninsula.

Meanwhile, the U.S. dollar index, designed to track the greenback against a basket of six major currencies, rose 0.17% to 93.72.

Dollar-denominated assets such as gold are sensitive to moves in the dollar – a gain in the dollar makes gold more expensive for holders of foreign currency and thus decreases demand for the precious metal.

Investors are also looking forward to a meeting of the US Federal Reserve’s Federal Open Market Committee that starts Wednesday. The Fed is widely expected to raise interest rates for the second time this year but the market is more focused on whether American central bankers will decide on four interest rate hikes this year.

In other precious metal trade, silver futures shed 0.25% to $16.910 a troy ounce, and platinum futures climbed 0.2% to $906.20 an ounce.

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