x
Breaking News
0

Gold Jumps On North Korea Jitters

By Kenny FisherCommoditiesAug 10, 2017 07:23
za.investing.com/analysis/gold-jumps-on-north-korea-jitters-200195951
Gold Jumps On North Korea Jitters
By Kenny Fisher   |  Aug 10, 2017 07:23
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Gold posted strong gains in the Wednesday session. In North American trade, spot gold is trading at $1272.93, up 0.97% on the day. On the release front, there are no major events on the schedule. US employment indicators missed their forecasts. Preliminary Nonfarm Productivity gained 0.7%, short of the forecast of 0.9%, while Preliminary Unit Labor Costs came in at 0.6%, well below the estimate of 1.1%. On Thursday, the US will release PPI, which is expected to remain at 0.1%. The markets are also expecting unemployment claims to remain steady at 240 thousand.

Gold prices have risen in recent weeks, taking advantage of a struggling US dollar. The rally continued on Wednesday, as geopolitical tensions have boosted the metal. The war of words between North Korea and the US has escalated, and the rising political tensions have sent global stock markets lower.

Pyongyang has reacted furiously to new sanctions imposed by Washington, and has threatened to attack Guam, which is a major US military base. President Donald Trump is taking a tough line on North Korea, and has promised that any aggression from North Korea will be met with “fire and fury.”

With Trump and North Korean President Kim Jong-un on a possible collision course, risk appetite has decreased, as nervous investors have snapped up gold, a traditional safe-haven asset. If the crisis worsens, we can expect gold prices to move towards the $1300 level.

Investor appetite for the US dollar has softened, as political risk has been growing and there are doubts if the Fed will raise rates before 2018. President Trump’s administration seems rudderless and Trump’s inability to pass healthcare legislation has increased political risk in the US.

As well, the Federal Reserve’s monetary policy remains unclear. Earlier this year the Fed strongly hinted that it planned to raise rates three times in 2017, but has only pressed the rate trigger twice. In June, Fed Chair Janet Yellen shrugged off low inflation, saying that it was due to “transient” factors, leaving the impression that the Fed still planned one final hike.

However, inflation has not improved and the Fed has changed its tune. Last week, St. Louis Federal Reserve President James Bullard said he opposed further Fed hikes, warning that another hike would actually delay inflation from hitting the Fed’s target of 2%. The markets have become more skeptical about a rate hike in December, as the odds have fallen to 34%, compared to 43% a week ago.

XAU/USD Fundamentals

Wednesday (August 9)

  • 8:30 US Preliminary Nonfarm Productivity. Estimate 0.7%. Actual 0.9%
  • 8:30 US Preliminary Unit Labor Costs. Estimate 1.1%. Actual 0.6%
  • 10:00 US Final Wholesale Inventories. Estimate 0.6%
  • 10:30 US Crude Oil Inventories. Estimate -2.6M
  • 13:01 US 10-y Bond Auction

Thursday (August 10)

  • 8:30 US PPI. Estimate 0.1%
  • 8:30 US Unemployment Claims. Estimate 240K

*All release times are EDT

*Key events are in bold

XAU/USD for Wednesday, August 9, 2017

Gold Chart
Gold Chart

XAU/USD August 9 at 12:10 EST

Open: 1257.23 High: 1260.02 Low: 1255.76 Close: 1259.10

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1170 1199 1232 1260 1285 1307
  • XAU/USD edged higher in the Asian and European sessions. The pair has posted considerable losses in North American trade
  • 1232 is providing support
  • 1260 is under pressure in resistance
  • Current range: 1232 to 1260

Further levels in both directions:

  • Below: 1232, 1199 and 1170
  • Above: 1260, 1285, 1307 and 1337

OANDA’s Open Positions Ratio

XAU/USD ratio is showing slight movement towards short positions. Currently, long positions have a majority (53%), indicative of XAU/USD reversing directions and moving higher.

Original post

Gold Jumps On North Korea Jitters
 

Related Articles

Gold Jumps On North Korea Jitters

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
Write your thoughts here
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
 
 
 
Add Chart to Comment
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email