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Gold Prices Rise as North Korea Tensions Keep Markets on Edge

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Originally Posted On: https://goldira.company/gold-prices-rise-north-korea-tensions-keep-markets-edge

 

On Wednesday the 9th of August 2017, Gold prices reached their peak after varying escalations within the past {two|2} months. The {Kim Jong-Un|Kim Jong Un|Kim Jong-Un} state delivered a nuclear attack threat to the U.S, saying that it had made considerations to attack the area of Guam in the pacific region of the U.S. In response to this, president Trump expressed his confidence in the American nuclear arsenal, stating that it was strong enough to engage in the case of such an occurrence.

In consequence, this created tension which resulted to uncertainty, that in turn spread across the global markets like wildfire, forcing shareholders and investors into the safe haven of other currencies, such as the Swiss franc. The volatility Index (VIX) hit a whooping 500, suggesting that resolutions must be made to reduce the growing tension within the markets.

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Since May 17th, gold futures have experienced their best performance, gaining at least 1.8%. Spot gold prices escalated from 1.31% to $1276.80 on each ounce. In the expected December statistics, gold futures in the U.S. are settling even for $1279.30 for every ounce. Note that, on Tuesday last week, prices had been low for almost two weeks, after which the strength of the dollar was found to be positive. For non-American investors, this means access to gold sold in dollars is way more expensive as compared to American investors.

According to Forex.com, continued tension between both countries could drive prices higher, yet this is all dependent on the strength of the dollar. Since Monday this week, gold prices have increased by 2%, currently sitting at $1291, even beating the expected gold futures of December of $1279.30. These levels have risen since May and June, escalating by 1% today alone. Notably, Forex.com predicts that these prices could rise even higher than $1295 by the end of this week.

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Pure Gold recently reported a 64% increase in the purchase of physical gold in both countries, attributing this to the intensifying tension between North Korea and the U.S. Contributing further, the company explains that the global market does not sustain uncertainty well, in this case the tension in North Korea, leading to the high prices in gold.

If the tension persists, Forex.com explains that gold prices may escalate further, and the figure $1295 may be achieved and even surpassed by far. For non- American investors, the strength of the dollar is a gauge that can be used to evaluate possible prices and trends in the prices of dollar-valued gold.

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