Gold soars, major indices fall after U.S., North Korea talks cancelled
A woman stands with a parasol in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Thursday, May 24, 2018. (AP Photo/Eugene Hoshiko)
Aleksandra Sagan, The Canadian Press
Published Thursday, May 24, 2018 12:21AM EDT
Last Updated Thursday, May 24, 2018 4:50PM EDT
The price of gold soared nearly $15 an ounce and major stock indices dipped Thursday after U.S. 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 per cent 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 77.57 cents US, 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 two cents to US$2.97 per mmBTU and the July copper contract gained about three cents to roughly US$3.10 a pound.