Last week, the gold price ended down as major issues from US deliver a good result, thus reduce the risk aversion sentiment from the gold investor across the world.
The Trump and Kim summit in Singapore, regarding the end of North Korea nuclear program, resulting commitment of denuclearization from North Korea, while US provide security guarantee to North Korea. The positive outcome reduce the potential geopolitical turmoil and limit the gold price to rise last week.
Other issues came from US President Trump, who were announcing import tariff on $50 billion Chinese goods, but responded differently by the gold price and end the Friday session lower.
As expected, the Fed once again rose their target rate to 1.75-2.00%, but as the move already absorbed by the market, USD index moved lower and kept the gold price steady below $1300 level after the announcement.
ECB, last week, were planning to halve its bonds buying to €15 billion a month from October and ended the program by the end of the year. The statement was limiting the gold price to rise above $1300 level and made the price ended below $1290 level.
Trade War between US & China on Focus
While any geopolitical risk and economic issues has passed last week with positive outcome, another negative issue from US and China still come in play as the fear of protectionism international trade still on the edge. The Chinese were planning to impose additional 25% tariffs on 659 US goods worth $50 billion to respond on US action last Friday. Will this issue make the gold price to be more fluctuate around $1300 level, with the rise of market risk aversion – avoiding the risk of trade war?
With the WTI oil price fell to below $66/barrel level, the OPEC meeting on 22-23 June will be the most anticipated event this week as it will plays the market risk sentiment. For the meeting, Saudi Arabia and Russia are looking to increase their production, meanwhile the issue is not unanimous with other OPEC member. Will the OPEC meeting drive the market risk sentiment and affect the gold price this week?