Geopolitical Sabre-Rattling Sends Gold to Two-Month Highs
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Geopolitical Sabre-Rattling Sends Gold to Two-Month Highs

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Geopolitical Sabre-Rattling Sends Gold to Two-Month Highs

Introduction

This article was posted on Thursday, 08:19, UTC.

Gold prices rode a tailwind of “fire and fury” Wednesday on route to two-month highs, as North Korea tensions triggered a bout of risk aversion in the financial markets.

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Precious Metals Surge

Risk avoidance sent gold prices sharply higher in mid-week trading. The December futures contract closed a hair below $1,280.00 a troy ounce on the Comex division of the New York Mercantile Exchange before extending gains during Asian trade. Prices touched a session high of $1,284.20 a troy ounce Thursday.

Bullion has gained nearly 1.5% this week, with the bulk of the buying occurring on Wednesday. Though presenting a solid technical picture, gold remains highly vulnerable to correction once investors move past the latest geopolitical gripe. The yellow metal has failed to take the $1,300.00 level several times this year, with each failed attempt triggering a sharp reversal.

Silver also spiked on Wednesday, with the September futures contract closing at $16.86 a troy ounce. Prices were little changed overnight as markets consolidated gains.

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The Threat of Nuclear Winter Spooks Investors

Geopolitical tensions have reached a boiling point on the Korean peninsula, with U.S. President Donald Trump vowing blitzkrieg over the North following a series of highly provocative missile tests. Earlier this week, the United States along with the United Nations imposed new sanctions on the hermit state. Pyongyang’s official KCNA news agency threatened the U.S. with “thousands-fold” revenge for the latest tactics.

Tensions concerning North Korea’s nuclear ambitions have helped push up gold prices more than 10% this year. The precious metal’s demand as a safe-haven will only escalate should the Trump administration seek new measures to strangle Pyongyang’s communist regime.

Gold’s appreciation has come at the expense of global equities, with markets from New York to Tokyo feeling the drag. Asian markets were down across the board Thursday morning. U.S. and European equity futures also traded lower.

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Sam Bourgi

Sam Bourgi

Sam Bourgi is Contributing Writer to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.

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