On Friday, President Donald Trump announced that the historic summit between North Korea and US will be held on 12th June. Within this announcement, gold price fell as uncertainty conditions between North Korea and US receded.
Meanwhile, the easing of concerns over political turmoil in Italy has been a factor in the decline of gold prices. Two Italian anti-establishment parties are working to form a new coalition government. Those parties avoided the general elections as the investors dreaded that it will serve as quasi-referendum of Rome’s membership in the European Union.
Last week US economic data that was released mostly positive. The positive data can be seen from US’s CB Consumer Confidence for the month of May was increased to 128 from April revision at 125.6, US’s ADP Employment Change for the month of May was released at 178K compare to April revision at 163K, US’s Average Hourly Earnings YoY growth for the month of May was released at 0.30% and higher than April released at 0.1%, US’s Non-Farm Payrolls for the month of May was released at 223K compare to 159K on April, US’s ISM Manufacturing PMI for May released is at 58.7, higher than April figures at 57.3.
The US Rate Hike
Previously the gold move down as the trio US employment data and the US manufacturing data shown a positive outcome that cause the correction of USD halted. With no important US economic data released this week (only ISM Service), the market tend to focussed on the FOMC Meeting on 13th June. Based on the CME Fed Funds Futures Rate there are chance of 91.3% the Fed will increase their interest rate to 1.75-2.00%. If the Fed decides to increase their rate as expected, the USD will have a chance to rise. Meanwhile, if the decisions is unchanged the gold price will have an opportunity to limit their tension.
US & North Korea Summit
Based on announcement made by President Trump, US and North Korea’s leaders will have meeting on June 12th in Singapore, regarding the end of North Korea’s nuclear program. But even with these progress, please note that any issue occurred that can cause the meeting to be halted or cancelled can cause the gold to fluctuate. Meanwhile, if the meeting goes well, the gold price will have a chance to move lower as geopolitical tensions receded.