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Trump calls off N.Korea summit; Gold breaks back above 1300

Summary:

  • US President Trump cancels meeting with N. Korea leader Kim Jong Un
  • Meeting had been seen as signalling end of tensions
  • Risk-off flows evident with Gold spiking higher and stocks falling

Breaking news from the US that president Trump has cancelled his highly anticipated meeting with N.Korean leader Kim Jong Un in Singapore next month, has caused an immediate reaction in the markets with Gold spiking higher and stocks getting hit as the US500 has fallen to its lowest level of the day and not far form recent lows around 2700. 

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 Gold has spike higher following the news and recaptured the 1300 level. Source: xStation

The letter from Trump has been openly published and reads as follows:

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 Trump’s letter stating his cancellation of the meeting with North Korea has been widely circulated in the press. Source: CNN

The latest development has negated what had seemed to be a major geopolitical breakthrough between the US and N.Korea, with both parties looking to come to the negotiating table after several years on tensions. Earlier today, Pyongyang said that it had destroyed its nuclear test site in a move that was aimed to show the regime its sincere about denuclearisation. 

The recapturing of the level around 1300 could be quite significant longer term for Gold and if price can end the day above here then the latest push lower appears to have failed. The 50% fib of the rally seen at the end of last year to the 2018 high of 1365 had provided fairly good support with several tests seeing buyers step in. The week before last this level was broken with a large thrust candle lower, but since then the market has failed to make a clear move below the 61.8% fib at 1285. This move lower could be seen to be a false breakout if the market can regain a footing above 1301 and should there be further weakness in stocks and the US dollar, then the scent could be set for a nice run higher in Gold. 

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 Gold has bounced from the 61.8% fib at 1285 and now moved back above the 1301 level. Source: xStation

 

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