March 09, 2018
PRECIOUS-Gold dips on firm dollar amid hopes for easing U.S.-N.Korea tensions
(Reuters) - Gold prices extended losses into a third session on Friday as the dollar strengthened against the yen on hopes of easing tensions between the United States and North Korea and ahead of U.S. non-farm payroll data later in the day.
U.S. President Donald Trump said on Thursday he was prepared to meet North Korean leader Kim Jong Un for the first U.S.-North Korea summit, marking a potentially dramatic breakthrough in nuclear tensions with Pyongyang.
"We are seeing reactions to the Trump-Kim Jong Un's potential for a discussion prompting a risk-on trade and that is putting some pressure on safe haven assets," said a Hong Kong based trader.
Spot gold was down 0.3 percent at $1,317.41 per ounce at 0405 GMT and was on track to post its third weekly decline.
U.S. gold futures were down 0.3 percent at $1,318.1.
Against the yen, the dollar rose 0.4 percent to 106.66 yen, inching away from a low of 105.24 yen on March 2, the greenback's weakest level since November 2016.
The U.S. dollar had tumbled to 16-month lows against the safe-haven yen late last week as fears of a trade war rattled markets after Trump announced his plan for imposing tariffs on imported steel and aluminium.
"We are moderately bearish on gold prices, and see the rising yield environment as a headwind," analysts at Societe Generale said in a note.
"That being said, we think U.S. rate hikes are already priced in for 2018, and ETF holdings have been very stable in recent history," analysts said, adding that they see gold prices at $1,275 per ounce in six months.
Spot gold may fall more into a range of $1,307-$1,312 per ounce, as it has pierced below a support at $1,317, according to Reuters technical analyst Wang Tao.
Investors were waiting on the release of the U.S. jobs report later on Friday that will include data on non-farm payrolls and average hourly earnings.
"I think today the market might get a little short, feeling that we will have good numbers and that risk is on," the Hong Kong based trader said.
In other precious metals, silver fell 0.5 percent to $16.41 per ounce.
Platinum dipped 0.6 percent to $946.50 per ounce, while palladium declined 0.3 percent to $974 per ounce.