Gold shines after Trump scraps North Korea Summit
Gold appears to be the asset that benefitted the most from the announcement that the White House cancelled the North Korea Summit that was scheduled to take place in June in Singapore with President Donald Trump and North Korea’s leader Kim Jong-Un. The dollar weakened broadly while U.S. stock markets declined on the news on Thursday. Asian stocks were mostly lower as well however, going into the European open, it appears that risk is creeping back. This is possibly because the meeting is still on the table as North Korea expressed on Friday that it is still willing to meet with Trump.
Investors rush to safe havens
Gold prices jumped higher in reaction to the cancellation of the North Korea Summit. The precious metal managed to break back above the key psychological level of $1300 on Thursday and continues to trade above it this morning. Silver also gained. The Swiss franc and the yen strengthened in a knee-jerk reaction but have managed to give back some of those gains as markets soon calmed down.
Oil prices took a tumble again after Russia’s energy minister reiterated that OPEC and Russia were considering easing the production limits that were put in place since January 2017. The reason is mainly to deal with a possible fall in global oil supply due to the sanctions on Venezuela and Iran. The OPEC meeting in June will be in focus for more details on OPEC’s decision. WTI crude oil is now trading in the $70 a barrel level after having hit the high $72 area earlier this week.
U.K. GDP and U.S. durable goods are main data points to focus on today
U.K. retail sales data on Thursday beat forecasts and sparked a rally in the British pound. April’s figure showed a rise of 1.6 percent versus 0.8 percent expected. The second estimate of U.K. GDP is due later today. Cable continues to trade in the $1.33 handle. U.S. durable goods orders will attract the market’s focus later today. A strong reading could prop up the dollar/yen pair which is trading below 109.70.