Gold recovers following latest North Korean missile test

Renewed tensions over North Korea have seen the gold price recover from its current slump, having hit eight-week lows. However, gains for gold are being held back in anticipation of the Federal Reserve minutes, which will be published at 19:00 BST.

Spot gold reached $1,228 last night, up $10 from Monday’s eight-week low.

Yesterday North Korean state TV said it had successfully test-launched an intercontinental ballistic missile (ICBM) which could reach “anywhere in the world”. The move coincided with the United States’ independence day.

US secretary of state, Rex Tillerson, described the test as “a new escalation of the threat to the United States, our allies and partners, the region and the world”, according to The Guardian. The newspaper noted there is now general agreement that this was Pyongyang’s most successful missile test since its ballistic missile programme gathered pace in the late 1990s.

The test has renewed calls by Washington for global action to deal with the rogue state. Whilst previously North Korea was primarily a threat to neighbouring South Korea and Japan, the increasing range of their missiles means both the US mainland is now in range. This is seen as problematic as it would make the US protection of its allies much more difficult.

“The market is turning to gold over the conflict in North Korea,” said Danske Bank senior analyst Jens Pedersen to Reuters. “But the market isn’t pricing in a further deterioration in relations because this conflict has been going on for a while.”

The Federal Reserve minutes will be released this evening. Investors will be looking for more clues as to the plans for monetary policy this year in order to plan strategy. Whilst the possibility remains that the central bank may begin rate hikes as early as September, the method by which their $4.5 trillion balance sheet will be trimmed is currently less clear.

Photo: North Korea — Pyongyang. Credit: (stephan), licensed under CC BY-SA 2.0 (edited).

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-recovers-following-latest-north-korean-missile-test-13258/

Posted by on Jul 5 2017. Filed under Gold News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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