Gold Remains Flat Above $1290 Price Handle

The yellow metal has come under pressure from a renewed bid-tone in the value of the U.S. Dollar Index and heightened risk-on trading sentiment, which is helping to underpin equity market buying. Gold is trading largely unchanged around $1,292 but looks weak if we take into account the repeated failure to cross the 20-day moving average last week. Moreover, the zero-yielding safe haven yellow metal found no takers last week, despite the Italian political crisis and the resulting risk aversion in the equity markets.

The recent strength in the U.S. dollar amid positive economic data has kept investor demand (for gold) subdued. The stronger-than-expected U.S. jobs data released on Friday fuelled expectations that the Federal Reserve would raise interest rates at its policy meeting starting on June 12. Higher interest rates boost the dollar, making dollar-denominated gold more expensive for buyers using other currencies, and they reduce investor interest in non-yielding bullion.

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Gold Remains Flat

North Korean leader Kim Jong Un is preparing for a high-stakes summit with U.S. President Donald Trump in Singapore on June 12. Meanwhile, concerns about global trade lingered following the United States imposing metal tariffs on Mexico, Canada, and the European Union last week. Tariff picture continues to remain quite unsettled, but somewhat surprisingly, is not causing much angst for the various markets. For now, we remain in a wait-and-see mode on gold, as investors mull which way to move forward.

Silver remains unchanged with 0.1% increase in value in all of Monday’s trading session. The XAGUSD pair seems to be trapped in the range of $16.40 to $16.49 for now. WTI is currently trading at $64.96, having made a high of $65.22 and a low of $64.72. The black gold is on the backfoot, extending the end of May’s downside, weighed by a lack of clarity with respect to when output will be increased by OPEC and its allies. Meanwhile, the Iranian oil ministry’s news agency SHANA reported an increase in Crude Oil export as Iran’s crude oil and condensate exports hit 2.7 million bpd in May, despite the US withdrawal from Iran’s nuclear deal and re-imposition of sanctions. WTIUSD traders are currently awaiting OPEC summit for further updates.