BENGALURU - Gold prices fell on Monday on revived hopes of a U.S.-North Korea summit, while a strong dollar also weighed on the market.
Spot gold was down 0.3 percent at $1,297.71 per ounce at 0243 GMT, while U.S. gold futures for June delivery fell 0.5 percent to $1,297.10 per ounce.
"It looks like there is some chance of a meeting between the U.S. and North Korea leaders, that would lower the geopolitical risks and lessen the appeal of gold," said John Sharma, an economist with National Australia Bank, adding that a strong dollar was also pressuring prices.
The dollar index, which measures the greenback against a basket of six major currencies, stood at 93.996, not far from 94.248 hit 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.
"Risk sentiment has opened in a much friendly place this morning as a relief rally has ensued with the Trump-Kim summit back on, while the EU is in the midst of a relief rally after Paolo Savona was not endorsed for finance minister in Italy," said Stephen Innes, APAC trading head at OANDA.
Efforts to form a coalition government in Italy collapsed on Sunday after its president rejected a eurosceptic pick for the key economy ministry, triggering a possible constitutional crisis and opening the prospect of fresh elections.
Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.42 percent to 848.50 tonnes on Friday.
Speculators trimmed 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.
In other precious metals, silver was steady at $16.47 per ounce.
Platinum gained 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.