Investing.com – Gold prices jumped more than 1% Thursday on the back of rising safe-haven demand after U.S. President Trump called off the Singapore summit with North Korea, scheduled for next month.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange rose by $15.20, or 1.18%, to $1,304.80 a troy ounce.
Trump blamed North Korea’s recent inflammatory comments and “open hostility” for the cancellation of the summit and warned the U.S. military was standby if needed.
"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 the long-planned meeting," Trump said in a letter to Kim.
The rise in geopolitical uncertainty renewed appetite for safe-haven gold, while a slump in the dollar amid fading expectations for more aggressive U.S. monetary policy tightening also sparked further upside in the precious metal.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell to 93.64.
Gold is sensitive to moves lower in both bond yields and the U.S. dollar – A weaker dollar makes gold cheaper for holders of foreign currency raising demand while a fall in U.S. bond yields, limits the opportunity cost of holding non-yielding assets such as bullion.
The fall in dollar emerged as traders digested the Fed’s minutes of its May meeting released Wednesday, in which policymakers said they were comfortable with inflation temporarily overshooting the central bank’s 2% target, denting investor hopes of more aggressive monetary policy tightening.
In other precious metal trade, silver futures rose 1.71% to $16.68 a troy ounce, while platinum futures gained 1.23% to $911.90 an ounce.
Copper rose 0.93% to $3.099.