Gold has inched higher in the Thursday session. In the North American session, the spot price for one ounce of gold is $1297.31, up 0.05% on the day. On the release front, U.S, unemployment claims ticked higher to 222 thousand, just below the estimate of 223 thousand. On Friday, G-7 leaders will gather in Quebec for their annual summit.
The upcoming G-7 meeting in Quebec is being closely monitored, as the summit comes at a time of escalating trade tensions between the U.S and some of its major trading partners. Last week, finance ministers from six members of the G-7 were united in their criticism of US Treasury Secretary Steve Mnuchin over the brewing trade war. The trouble started last week, when the Trump administration slapped stiff tariffs on Canada, Mexico and the European Union. This resulted in promises of retaliation, and Canada and Mexico have already announced duties on U.S products. The trade spat is sure to dominate the summit, but will the leaders resolve matters? If not, investors could head for the hills and dump their riskier assets in favor of safe-haven gold.
Gold prices have been steady in June, as the base metal continues to hover close to the $1300 level. Recent geopolitical hotspots include Italy and North Korea, but both of these are calmer this week, boosting risk appetite. Italy has formed a government after months of political drama, and the on-again-off-again summit between Donald Trump and Kim Jong-un will indeed take place in Singapore next week. Although no agreements are expected to be signed at the summit, both leaders are unconventional and could surprise the world with a dramatic breakthrough in the longstanding Korean conflict. If this occurs, risk appetite could sore and send gold prices downwards.
