Gold prices surged on Thursday, propelled above $1,300 per ounce 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.
Spot gold was up 1 percent at $1,305.60 per ounce by midday Eastern while U.S. gold futures for June delivery climbed 1.2 percent, also to $1,305.60 per ounce.
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 in March.
“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. Among other precious metals, silver gained 1.3 percent to $16.63 an ounce, platinum climbed 1.5 percent to $912.60 an ounce after touching the highest since May 14 at $914.30, and palladium shed 0.3 percent to $973.90 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.”
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