Price of Gold Fundamental Daily Forecast – Traders Acting Like US-North Korea Meeting is Done Deal

Gold futures are retreating early Monday on revived expectations of a U.S.-North Korea summit. Traders are ignoring the weaker Dollar, but may be reacting to slightly higher U.S. Treasury yields based on the weaker June 10-year U.S. Treasury Note futures contract.

At 0751 GMT, June Comex Gold futures are trading $1301.90, down $7.10 or -0.54%.

Today’s price action suggests investors are betting on a meeting between the U.S. and North Korean leaders. If this proves to be valid then gold could erase all of last week’s gains since the news would lower geopolitical risks and lessen the appeal of gold as a safe-haven asset.

Today is a U.S. bank holiday so the price action may be limited or exaggerated due to low volume. Last week, gold formed a potentially bullish closing price reversal bottom after President Trump announced the cancellation of his June 12 meeting with North Korean President Kim Jong-un.

To recap the events over the week-end, American and North Korean officials met at the border between North and South Korea in preparation for a possible North Korea-U.S. summit, as North Korea’s Kim Jong-un was cited as reaffirming his commitment to meet with U.S. President Donald Trump.

President Donald Trump tweeted, “Our United States team has arrived in North Korea to make arrangements for the Summit between Kim Jong-un and myself. I truly believe North Korea has brilliant potential and will be a great economic and financial Nation one day. Kim Jong-un agrees with me on this. It will happen!”

In other news, speculators trimmed their net long position in COMEX gold by 3,800 contracts to 27,527 contracts in the week to May 22, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday. This was the smallest position since July 2017.

On the charts, gold is in a down trend. Last week’s rally was likely driven by short-covering and position-squaring. Buyers are going to have a difficult changing the trend to up under normal trading conditions because of rising Treasury yields, the hawkish Fed monetary policy and the strong U.S. Dollar.