The price of gold soared nearly US$15 an ounce and major stock indices dipped Thursday after United States President Donald Trump said he is cancelling a planned meeting with North Korean leader Kim Jong Un.
The June gold contract advanced US$14.80 to US$1,304.40 an ounce and the global gold sector performed the best for the day on the S&P/TSX composite index with shares gaining on average 1.74% of their worth.
“Whenever there’s fear in the world or uncertainty, people buy gold,” said Allan Small, a senior investment adviser at HollisWealth. “That’s what they do.”
The current uncertainty comes after Trump sent a letter to Kim cancelling a planned summit in Singapore. The meeting would have been a historic first and even sparked talk of a possible Nobel peace prize for the billionaire president.
While the sharp about-face provided a boost for the precious metal, it dampened market sentiment.
The TSX fell 20.18 points to 16,113.62.
In New York, the Dow Jones industrial average retreated 75.05 points to 24,811.76. The S&P 500 index lost 5.53 points to 2,727.76 and the Nasdaq composite index declined by 1.53 points to 7,424.43.
“The political headlines are, I guess, taking over the markets,
Small said, adding the drops are not very large because the markets are taking a longer-term view that they don’t believe anything significant will come of this.”
“We’re kind of getting climatized to all the talk,” he said.
The Canadian dollar averaged US77.57¢, down 0.09 of a U.S. cent.
Elsewhere in commodities, the July crude contract retreated US$1.13 to US$70.71 per barrel, the July natural gas contract advanced about US2¢ to US$2.97 per mmBTU and the July copper contract gained about US3¢ to roughly US$3.10 a pound.