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Gold slumps as dollar strengthens against yen post Trump-Abe meet

Gold slipped on Monday as the dollar strengthened against the yen, with the greenback buoyed by a smooth meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe that saw no mention of currency policy.

Spot gold shed 0.3 percent, to $1,229.77 per ounce at 0320 GMT, while U.S. gold futures fell 0.4 percent, to $1,231.

The dollar index was up 0.16 percent to 100.960, with the greenback risng against the yen on relief that Trump set aside his tough campaign rhetoric over security and jobs in a meeting with Abe over the weekend.

“Quietness on the protectionism front and a rekindling of Trump’s flation trade is taking the wind out of gold’s safe-haven sails,” said Jeffrey Halley, senior market analyst at OANDA.

A senior Japanese government spokesman said Abe and Trump did not discuss currency issues and that Trump did not request a bilateral trade deal.

The dollar had suffered its worst January in three decades after President Trump complained that every other country lives on devaluation.

The U.S. currency also found broad support from comments by Trump on Thursday that he planned to announce an ambitious tax reform plan in the next few weeks, rekindling hopes for big tax cuts.

Spot gold may revisit its February 10 low of $1,221.02 per ounce, as its correction from the February 8 high of $1,244.67 has not completed, according to Reuters technical analyst Wang Tao.

Speculators raised their bullish wagers in COMEX gold to the highest in two months in the week to February 7, and raised it slightly in silver, U.S. Commodity Futures Trading Commission data showed on Friday.

In other precious metals, spot silver was mostly unchanged at $17.95 per ounce, after touching $18, the highest since November 11, 2016, earlier in the session.

Platinum eased by 0.3 percent, to $1,007.15 per ounce.

Palladium was mostly flat at $783.73 per ounce, after hitting $786.90, its highest level in over two weeks.

Source: Reuters

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