Investing.com - Gold prices were little changed in European morning trade on Friday as investors looked forward to the start of the Group of Seven summit.
At 4:02AM ET (8:02GMT), gold futures for August delivery on the Comex division of the New York Mercantile Exchange slipped 40 cents, or 0.03%, to $1,302.60 a troy ounce.
In a session with no major U.S. economic data, market participants will focus on the G7 meeting which kicks off on Friday in Quebec. France and Germany warned the U.S. that they would not sign a joint statement without concessions, but the American top economic adviser Larry Kudlow warned this week that U.S. President Donald Trump would not back down from his tough stance on trade.
“The American President may not mind being isolated, but neither do we mind signing a 6 country agreement if need be,” French President Emmanuel Macron said this week.
Kudlow called the current situation a “family quarrel” and Trump was expected to have one-on-one meetings with the leaders of Canada, France and Japan on the sidelines of the G7 conference.
Trump showed no signs of conciliation late Thursday when he accused France and Canada of “charging the U.S. massive tariffs and create non-monetary barriers”.
Traders will also keep a close eye on the upcoming June 12 summit between Trump and Korean leader Kim Jong Un in Singapore. The U.S. President said Thursday he may sign an agreement to formally end the Korean War with North Korean leader Kim Jong Un at their meeting. He also raised the possibility of later hosting the Kim at the White House.
Although Trump said he expected “great success”, he made clear that nothing was a done deal. He said the public would be able to follow the progress on talks by his language, specifying that a return to “maximum pressure” would indicate a breakdown of negotiations.
The outcome of tensions between the two countries would likely have a direct impact on the safe haven precious metal.
Also next week, market participants will closely follow monetary policy decisions by both the Federal Reserve and the European Central Bank.
The Fed is widely expected to raise interest rates by 25 basis points and investors will be watching to see whether policymakers project one or two further hikes this year.
Higher interest rates tend to weigh on demand for gold, which doesn’t bear interest, in favor of yield-bearing investments.
Close attention will also be paid to the ECB meeting. While markets expect no action at next week’s meeting, ECB chief economist Peter Praet said Wednesday that officials are increasingly confident that inflation is rising back towards the bank’s target and will debate whether to begin gradually scaling back its asset purchase program.
The remarks have helped bolster the euro to a three-week high against the dollar. The corresponding weakness in the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies and has traded lower for the last four sessions, has helped support gold prices as the precious metal becomes more affordable to holders of foreign currencies.
In other metals trading, silver futures fell 0.6% at $16.715 a troy ounce by 4:04AM ET (8:04GMT).
Palladium futures dropped 0.3% to $1,007.00 an ounce, while sister metal platinum inched up 0.03% at $900.60.
In base metals, copper traded down 0.5% to $3.260 a pound.