One week after hitting its lowest point of 2018, gold surged back over the $1,300 mark on Thursday. The increase comes after United States President Donald Trump canceled a planned summit earlier in the day.
Stocks are moving wildly now that President Trump will not meet with North Korean leader Kim Jong Un. The two world leaders were planning a June 12 summit, but President Trump called it off.
The news is a significant setback for United States diplomacy. However, there are positives if you look in the right places.
One area reaping benefits of the decision is the precious metals market. Gold stock is rallying significantly after a lengthy tailspin.
On May 17, 2018, gold closed at just $1,289.60, its lowest mark of the year. Just a week later, however, the yellow metal is on a comeback tour. The price of gold rose $11.30 per ounce on Thursday alone.
The spurt drives gold to its highest mark since May 14, 2018. Percentage-wise, gold went up .87 percent Thursday.
Silver also saw a jump in the right direction. The lesser precious metal rose 1.19 percent to 16.61 on May 24.
On the other hand, the United States stock market, the U.S. dollar, and yields from the U.S. Treasury all suffered losses on Thursday.
This inverse relationship with precious metals is typical, though.
While Thursday marks a proud day for the precious metal market, some think it will not stick.
The Federal Reserve next meets in June, and many are expecting another rate hike. If they do implement a new increase, gold could see more decline. Nothing is guaranteed, though.
Typically, gold is sold highly before rate hikes, driving down the value. Shortly after the implementation, though, the precious metal tends to rally.
For now, though, it is vital that gold continues to build ahead of a potential rate increase. That way, if something does drive it down, there is a cushion to fall on.