June 12, 2018 / 4:14 AM / 6 months ago

PRECIOUS-Gold dips on strong dollar post Trump-Kim meeting; Fed in focus

    * Trump, Kim sign agreement after historic summit
    * Investors braced for U.S. rate hike on Wednesday
    * Dollar reaches 3-week highs vs yen

 (Adds detail, updates prices)
    By Karen Rodrigues
    BENGALURU, June 12 (Reuters) - Gold prices edged lower on
Tuesday as the dollar strengthened following a positive
U.S.-North Korea summit, with markets now waiting for a likely
interest rate hike by the U.S. Federal Reserve.
    Spot gold        was down 0.1 percent at $1,297.96 per ounce
at 0719 GMT and U.S. gold futures         for August delivery
were 0.1-percent lower at $1,301.90 per ounce.
    "The dollar has been a big driver for some time now and
investors are certainly taking more from that than from easing
geopolitical risks in recent runs ... I suspect that will be the
key driver for the short term," said ANZ analyst Daniel Hynes.
    The dollar hit a three-week high against the yen on Tuesday
and Asian shares gained as U.S. President Donald Trump and North
Korean leader Kim Jong Un signed a "comprehensive" deal at a
historic summit aimed at the denuclearisation of the Korean
peninsula.                  
    Trump said the closely watched summit with Kim in Singapore
was "really very positive" and that he expected the
denuclearisation process to start "very, very quickly". 
            
    "The market is starting to price in slightly less
geo-political risks," Hynes said. 
    Easing geopolitical worries are bearish for gold as the
metal is seen as a safe investment during times of political
uncertainty. This coupled with higher interest rates dent the
appeal of greenback-denominated, non-interest paying bullion.
    "We are all waiting for the Fed meeting, the FOMC should be
more of the focus for the market," said Mark To, head of
research at Hong Kong's Wing Fung Financial Group.
    The Federal Open Market Committee's (FOMC) is widely
expected to raise interest rates in its two-day meeting, which
begins later in the day.
    The European Central Bank and Bank of Japan also have policy
meetings this week.
    Gold is expected to be volatile this week amid the
U.S.-North Korea summit and central bank meetings Wednesday
through Friday, said MKS SA senior precious metals dealer Alex
Thorndike.
    "Producer selling in gold continues to cap a definitive move
through $1,300-1,305, while Asian buying in the low $1,290s
continues to support on dips," he said.
    In other precious metals, silver        fell 0.1 percent to
$16.87 an ounce. It hit a seven-week high of $16.95 on Monday.
    Palladium        was down 0.2 percent at $1,020 an ounce.
Platinum        was up 0.2 percent at $905.90. Platinum touched
a one-week high of $910.50 in the previous session.

 (Reporting by Karen Rodrigues and Swati Verma in Bengaluru;
Editing by Sunil Nair and Joseph Radford)
  
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