Gold Prices Up More Than 1% As President Trump Cancels North Korean Summit
Washington (May 24) Geopolitical uncertainty is back in the marketplace, boosting gold prices higher Thursday, as President Donald Trump cancels his much-anticipated historic meeting with North Korean Leader Kim Jong Un.
“Trump's scuttling of the summit with North Korea is not surprising, but it still produces an uptick in geopolitical uncertainty, which is bullish for safe-haven gold and silver,” said Kitco’s senior technical analyst Jim Wyckoff.
Gold prices pushed solidly into positive territory, above $1,300 an ounce, following the breaking development. June gold futures are up 1.23% on the day, last trading at $1,305.40 an ounce.
“I was very much looking forward to being there with you,” Trump said in the letter to the North Korean government. “Sadly, based on the tremendous anger and open hostility displayed in your most recent statement, I feel it is inappropriate, at this time, to have this long-planned meeting.”
Phillip Streible, senior market analyst at RJO Futures, said that the renewed geopolitical uncertainty will help put gold bulls back in the driver’s seat. He sees prices moving higher in the near term.
Streible added that not only is gold’s safe-haven appeal boosting prices, but so are the Federal Reserve’s latest comments on inflation.
“Gold is benefitting from geopolitical issues but the Fed is clearly not concerned with rising inflation and that is giving investors more confidence,” he said. “If gold prices can close above $1,300 an ounce, then I would suspect the market will take a run at the 200-day moving average at $1,316 an ounce.”
According to some economists, with the North Korean summit now on ice, President Trump could take a harder stance on China, as the U.S. tries to negotiate a trade deal with the country, further increasing global economic uncertainty.
Other political scientists have said that while Trump has cancelled the June meeting, his comments does not completely rule out another potential meeting further down the road. Some analysts have noted that this could be a negotiation tactic after recent comments from Kim Jong Un.
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