North Korea Conflict Sends Gold Rising
Gold prices are benefitting from increased tensions between the United States and North Korea. The precious metal started the week on the rise as tensions between the two countries continue to mount. US President Donald Trump recently said “only one thing will work” on his Twitter account, which left markets jittery.
The treat caused heavy investing in gold, sending December gold up 0.63% to $1,282.88 a troy ounce, up $7.97.
Safe-haven demand from Friday to Monday continued to rise despite expectation that the dollar’s strength would limit gold’s gains. North Korea is reported to be testing a long-range missile with the capability to hit the United States’ West Coast.
photo/ Steve Bidmead via pixabay
The dollar’s strength continues to remain strong in the wake of the threat, as U.S. jobs report data pointed to a potential rise in inflation. The Labor Department noted a loss of 33,000 jobs in September. The decline is the first in seven years. Hiring was subdued in the wake of Hurricane Harvey and Irma.
Hourly earnings rose by an average of 2.9% from the previous year. Unemployment levels are at their lowest levels since 2001 at 4.2%.
Heighted tensions led to an increase of 401k to gold IRA rollover.
Gold, sensitive to the strength of the dollar and U.S. rates, is impacted when the dollar is stronger. A strong dollar leads to higher gold prices for foreign buyers.
Silver futures also rose sharply on Monday, gaining 0.79% to $16.922 a troy ounce.
Trump’s comments on North Korea are expected to have a long impact on precious metal prices. The President was quoted as saying that a gathering with military officials last week could be “the calm before the storm.”
North Korea continues to bolster its nuclear arsenal and promote its importance. Kim Jong Un, North Korea’s leader, called his country’s nuclear weapons program a “treasured sword.” The state media reported that he believes the program is essential to maintain his country’s independence.
The United States may be alone in their aggressive stance on North Korea. No other countries have publicly backed military intervention in North Korea. Russia has reported that even a strike on the country has no guarantee of success.
Gold, silver and copper investors are waiting for the Fed’s minutes to be released on Wednesday for clues of the next rate hike. The focus will be pointed on inflation and retail sales data, which are set for a Friday release.
Mario Draghi, European Central Bank President, will be the focus of European trading, as investors look at comments for clues of policy easing. Japan’s financial markets remained closed on the day.
Investors will look for UK manufacturing production data on Tuesday, U.S. product price inflation data on Thursday and China’s trade data on Friday.
Asia’s week-long break is over on Monday, supporting gold prices in Asia. Gold prices rose in the region 0.88% to $1,286 a troy ounce. Gold prices rebounded last week, rising off of two-month lows after the yellow metal fell 0.8% marking its fourth weekly decline.
Interest rate futures predict a 90% chance that the interest rate will be raised in December.
Author: Jacob Maslow
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