The spot price of gold was down marginally after the landmark summit between United States President Donald Trump and North Korean leader Kim Jong-un came to a close. Both leaders made declarations of new friendship and promised a new path forward, but nothing concrete was established.
President Trump vowed to end U.S.-South Korea military exercises, supposedly in response to a denuclearization commitment from North Korea. Both leaders signed a document that reaffirmed North Korea’s path to denuclearization. In spite of all of the apparent positives, the summit will act as a prelude to negotiating between U.S. and North Korean officials who will hammer over the details at a later date.
The spot price of gold was down 0.15% in early afternoon trading on June 12. The promise of easing tensions on the Korean Peninsula may apply downward pressure in the near term, even as geopolitical tensions between the U.S. and its allies have worsened. Still, the lack of a concrete agreement should inspire skepticism even after the warm atmosphere we saw at this historical summit.
In any case top gold equities will continue to be a gamble this summer. Yamana Gold Inc. (TSX:YRI)(NYSE:AUY) was up 0.51% in early afternoon trading and Goldcorp Inc. (TSX:G)(NYSE:GG) was holding even.
It is hard not to be optimistic about the future on the Korean Peninsula after this summit, but investors should watch events closely as no tangible resolutions have been reached.
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