North Korea, Middle East Drive a Surge in Gold Prices
Gold prices rose to $1,272 after strong gains on Tuesday, as continued political unpredictability sends investors to seek a safe haven in the commodity.
Political tensions have not yet begun to subside; flashpoints across the globe continue to boil, putting the temperature of the bullion back on the rise.
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The United States has moved military assets closer to North Korea, which is a nuclear-armed nation. The devastating capabilities of the often-rogue actor, coupled with the U.S.’s increasingly warlike tone, have injected worry once more into the market, despite economic signs pointing toward progress for the United States.
The approaching French presidential election is also having a positive effect on gold prices. As the far-right Front National (which is an anti-European Union (EU) political party) remains one of the stronger contenders for power in the country, analysts are seeking assets to hedge against the negative effect on the euro, should the Front National emerge the victor in the election.
With a steady stream of political events recently making headlines—from the U.S. attack on the Syrian government, to the meeting between Donald Trump and Chinese President Xi Jinping, to the G7 gathering—gold prices have been the beneficiaries of instability.
With an upcoming meeting between U.S. Secretary of State Rex Tillerson and his Russian counterpart, gold prices will likely be impacted by what emerges as a result of the meeting.
Tillerson has recently made public statements that Syrian President Bashar al-Assad would have to be removed, a sticking point in foreign policy relations between the U.S. and Russia.
If the talks between Russia and the U.S. strike a sour tone, expect gold prices to rise. The continuing situation in North Korea and any further escalation in tension is also likely to push gold bullion higher, as well as increase the potential for U.S. attacks on Syrian targets.
