LONDON: Gold prices steadied on Friday after breaking above $1,300 an ounce in the previous session when US President Donald Trump called off a meeting with North Korean leader Kim Jong Un, raising political tensions.

Spot gold was up 0.1 per cent at $1,306.03 an ounce at 1141 GMT and on track for a weekly gain of 1.1pc, its biggest since March. US gold futures for June delivery were also 0.1pc higher at $1,305.60.

Gold is traditionally used as a safe place to park assets in times of uncertainty, but Trump’s decision would have limited impact on prices, said Julius Baer analyst Carsten Menke.

“This is pretty typical for these kinds of geopolitical jitters. Very short-term sharp reaction, then a lack of follow through, given that this basically does not have any implication for the global economy or financial markets,” he said. “Based on this pattern and on gold’s very tight relationship with the US dollar, this uplift in price should be temporary and we should fall back below $1,300 an ounce.”

Gold tends to move higher when the US dollar weakens because this makes dollar-priced bullion cheaper for buyers with other currencies. But after losing ground on Thursday the dollar strengthened with support from a North Korean statement that it was open to resolving issues with the United States.

In other precious metals, silver was up 0.3pc at $16.68 an ounce, on track for a weekly gain of 1.6pc. Platinum was 0.1pc higher at $910, up 3.1pc on the week, while palladium was up 0.5pc at $979 and set for a weekly gain of 1.7pc.

Published in Dawn, May 26th, 2018