Gold jumps, dollar falls after Trump cancels N.Korea summit

Posted on May 24, 2018 by Bob G. There have been 0 comments

By - Bob G.

Gold prices surged on Thursday, propelled above $1,300 per ounce as the U.S. dollar
faded after U.S. President Donald Trump called off a summit with North Korea, stoking political tensions. Trump canceled the meeting with Kim Jong Un, planned for June 12, even after North Korea followed through on a pledge to blow up tunnels at its nuclear test site. The cancellation prompted investors to seek a safe store of value.

Spot gold gained 0.9 percent at $1,305.18 per ounce by 1:34 p.m. EDT (1734 GMT), earlier hitting $1,306.56, a nine-day high. U.S. gold futures for June delivery
settled up $14.80, or 1.2 percent, at $1,304.40 per ounce. "Gold got momentum on news the North Korea meeting was canceled," said Phil Streible, senior market strategist at RJO Futures.

Before the North Korea news, spot gold was slightly firmer but had been losing ground for weeks, shedding 5 percent since touching $1,365.23 on April 11, the highest in nearly three months. Funds had cut long positions in gold to a 10-month low, but
the move back above key technical levels of $1,300 and $1,305 was spurring a rush by speculators into bullion, Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, said.

"It's a struggle to find any gold-negative news at the moment," he added. Gold's safe haven appeal was also burnished after the U.S. launched a national security investigation into car and truck imports that could lead to new tariffs similar to those it imposed on steel and aluminum. "Trade spats are recurring and there's a focus on troubled emerging markets," Hansen said. Turkey has been in the spotlight and the lira weakened more than 2 percent, the day after a huge emergency interest rate hike intended to stem its slide.

Gold was also buoyed by a weaker dollar, which slipped to a near two-week low against the Japanese yen, and lower U.S. Treasury yields. "The Fed meeting minutes that appear to be less hawkish on interest rates," from Wednesday provided gold more support, Streible added. Among other precious metals, silver gained 1.5 percent at $16.67 an ounce, platinum climbed 1 percent at $907.74 an ounce after touching the highest since May 14 at $914.30. Palladium shed 0.1 percent at $976 an ounce.

Stephanie Aymes, head of technical analysis at Societe Generale, said in a note that platinum has rebounded from a multi-year trend at $890 and was now approaching a down sloping channel near $924/31. "A cross above this is needed for signs of rebound."

SOURCE - REUTERS


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