Gold ticks up following Trump comments on South Korean trade deal and defence

Gold ticked up slightly overnight as Asia reacted to remarks by US president Donald Trump with regards to South Korea, defence of the region and free trade. According to Investing.com gold rose 0.02%, to $1,266.11.

Speaking to Reuters Trump said he would either renegotiate or terminate what he called a “horrible” free trade deal with South Korea and said Seoul should pay for a U.S. anti-missile system that he priced at $1 billion. He referred to the current deal as “unacceptable” and said it would be targeted for renegotiation after his administration completes a revamp of the North American Free Trade Agreement (NAFTA) with Canada and Mexico.

Gold’s bullish run through 2017 came to an end this week following Emmanuel Macron’s emergence as the frontrunner in the French presidential race and strong market performances. However mixed market reactions to Trump’s tax plans and ongoing geopolitical tensions over Korea make it difficult to determine whether the current uptick will actually reverse the downward trend.

Meanwhile, a report released by Capital Economics, a London-based researcher, pointed to behavioural finance indices to suggest gold would hit $1,050 this year. In a note the group said: “We acknowledge that political tensions could periodically support the price of gold this year. However, we doubt that any gains can be sustained given the prospect of rising US interest rates and the associated appreciation of the dollar that we project. Indeed, we forecast that the price of gold will fall to $1,050 per ounce by end-2017. This appears consistent with market expectations for global economic activity.”

However this was not a view shared by another report released today. Charlie Morris of Atlas Pulse, saying gold remains much closer to neutral with a surge due: “Gold is becalmed because inflation remains muted. Yet, that doesn’t make the situation bearish, just neutral. If inflation picked up, gold would surge higher while equities would get punished – especially if inflation came within reach of 4%. And that’s why you should hold onto your gold.”

“At some point, that may well happen. Other than inflation, gold could move higher by shooting to a premium. However, for that to happen in sufficient size, you would need to see the gold price start to beat the stockmarket. That is still not the case and that’s why the Atlas Pulse view is that the long-term gold trend remains neutral.”

“Gold is a safe-haven in waiting. It’s unlikely to fall far, yet at some point it will surge. That’ll come in good time. Be patient.”

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-ticks-up-following-trump-comments-on-south-korean-trade-deal-and-defence-13108/

Posted by on Apr 28 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.

1 Comment for “Gold ticks up following Trump comments on South Korean trade deal and defence”

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