2018.05.2801:56:00UTC+00Gold Prices Drop on Renewed Expectations of U.S.-North Korea Summit

Gold prices dropped on Monday on renewed expectations of a U.S.-North Korea summit, while a firm dollar added pressure on the market.

Spot gold fell 0.3 percent to $1,297.71 per ounce.

U.S. gold futures for June delivery were down 0.5 percent at $1,297.10 per ounce.

The dollar index, which measures the greenback versus a basket of six major peers, was at 93.996, not far from 94.248 notched on Friday, its highest since Nov. 14.

Donald Trump said on Sunday that a U.S. team had arrived in North Korea to prepare for a proposed summit between him and Kim Jong Un.

Efforts to form a coalition government in Italy collapsed on Sunday after its president rejected a eurosceptic choice for the key economy ministry, triggering a possible constitutional crisis and opening the prospect of new elections.

Holdings of SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, dropped 0.42 percent to 848.50 tonnes on Friday.

Speculators reduced their net long position in COMEX gold by 3,800 contracts to 27,527 contracts in the week to May 22, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday. This was the smallest position since July 2017.

Physical gold demand remained subdued last week in most Asian hubs as prices rebounded following an initial decline, while dealers in India offered bigger discounts to fuel buying amid high domestic prices.

Among other precious metals, silver was steady at $16.47 per ounce. Platinum added 0.4 percent to $900.10 per ounce, while palladium eased 0.1 percent to $978.97.

Trading volumes are expected to be low as the New York and London markets are closed on Monday for public holidays.