Gold Subdued, Markets Glued to Trump-Kim Summit

Gold is steady at the start of the trading week. In Monday’s North American session, the spot price for one ounce of gold is $1300.74, up 0.11% on the day. On the release front, there are no major U.S. events on the schedule. On Tuesday, the focus will be on inflation, with the US releasing CPI and Core CPI reports.

The Group of Seven appears to be in disarray, after a dismal summit in Quebec on Friday and Saturday. The summit exposed sharp disagreements between U.S. President Trump and the other six members, and shockingly, the leaders failed to produce a joint statement after the summit. Trump openly clashed with the other leaders over his recent tariffs against the European Union and Canada and tweeted that Canadian Prime Minister Trudeau, who hosted the summit, was “dishonest and weak”. Canada and the EU are furious over recent US tariffs, especially because of Trump pushed them through on the basis of ‘national security’. The glaring cracks in G-7 unity could cast a long shadow on trade relations between the U.S and the “G-6”, with business confidence and capital spending at risk if the tariff spat continues. This could unnerve investor confidence and boost gold, a traditional safe-haven asset in times of trouble.

Investors are keeping a close eye on the historic summit between US President Trump and North Korean President Kim Jong-un in Singapore on Tuesday. The meeting will mark the first ever face-to-face meeting between leaders of the U.S and North Korea. It remains unclear if the two leaders will sign any agreements, or will the sides treat the summit as a “getting to know you” opportunity. Given the magnitude of the event, traders should be prepared for movement in gold prices on Tuesday, especially if progress is made regarding the denuclearization of North Korea.

XAU/USD Fundamentals

Monday (June 11)

  • 13:01 US 10-year Bond Auction

Tuesday (June 12)

  • 8:30 US CPI. Estimate 0.2%
  • 8:30 US Core CPI. Estimate 0.1%

*All release times are DST

*Key events are in bold

 

XAU/USD for Monday, June 11, 2018

XAU/USD June 11 at 12:40 DST

Open: 1299.24 High: 1302.23 Low: 1294.25 Close: 1300.74

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1236 1260 1285 1307 1337 1375

XAU/USD showed little movement in the Asian session. In European trade, the pair edged lower but then recovered. XAU/USD has edged higher in North American trade

  • 1285 is providing support
  • 1307 is the next resistance line
  • Current range: 1285 to 1307

Further levels in both directions:

  • Below: 1285, 1260 and 1236
  • Above: 1307, 1337, 1375 and 1416

OANDA’s Open Positions Ratio

In the Monday session, XAU/USD ratio is showing long positions with a majority (69%). This is indicative of trader bias towards XAU/USD continuing to move to higher ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.