Gold eases on firmer dollar; US-N.Korea summit, Fed meeting in focus

BENGALURU: Gold prices edged lower on Tuesday, weighed down by a stronger dollar amid encouraging signs ahead of an historic US-North Korea summit and a likely interest rate hike by the US Federal Reserve.

FUNDAMENTALS

Spot gold was down 0.2 per cent at $ 1,297.68 per ounce at 0046 GMT.

US gold futures for August delivery were 0.1 per cent lower at $ 1,301.60 per ounce.

The dollar index , which measures the greenback against a basket of six major currencies, edged 0.3 per cent higher at 93.819.

US President Donald Trump said his summit with North Korean leader Kim Jong Un in Singapore on Tuesday would show if a “real deal” could happen, as both sides sought to narrow differences over how to end a nuclear standoff on the Korean peninsula.

US inflation expectations were flat in May after several months of gains, while Americans grew more pessimistic about income and spending growth, according to a Federal Reserve Bank of New York survey published on Monday.

The Federal Reserve, which meets this week, will likely raise its target interest rate to above the rate of inflation for the first time in a decade, igniting a new debate: when to stop.

Trump fired off a volley of tweets on Monday venting anger on NATO allies, the European Union and Canadian Prime Minister Justin Trudeau in the wake of a divisive G7 meeting over the weekend.

Bank of Japan policymakers will debate this week whether structural factors may be behind recent disappointingly slow inflation, which could force them to cut the central bank’s price forecasts at a quarterly review in July.