Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities


US Political Turmoil, Renewed North Korean Tensions Push Gold Closer to $1,300

August 21, 2017 at 16:53 by Andrew Moran

Gold futures are inching closer to the important $1,300 threshold. With investors losing confidence in President Donald Trump and his ability to enact a pro-business agenda and renewed US-North Korea tensions to start the week, traders are flocking to the yellow metal in a safe-haven play.

December gold futures rose $3.50, or 0.27%, to $1,295.10 per ounce at 16:37 GMT on Monday. Gold prices pared some of their gains after hitting a daily high of $1,299.70. The precious metal recorded a weekly gain of 0.6% last week, and has advanced more than 11% year-to-date.

Silver, the sister commodity to gold, is trading flat to kick off the trading week. September silver futures jumped $0.01, or 0.7%, to $17.00 an ounce. The white metal also posted a weekly gain of 0.1% last week.

The yellow metal has benefited from chaos ensuing in the White House. With the barrage of daily media attacks against President Trump, a string of resignations occurring on 1600 Pennsylvania Avenue, and the president’s inability to implement his pro-business agenda, investors are starting to minimize their support for the administration.

After many thought the geopolitical risks emanating from East Asia had come to an end, there are renewed tensions between Pyongyang and Washington. This is because South Korea and the US launched another round of military exercises in the region on Monday, something that the Kim Jong-un regime has disapproved of for so long.

Gold made further gains by a lower US dollar as the greenback tumbled 0.36%. A weaker US dollar is good for commodities like gold and silver because it makes it cheaper for foreign investors to buy gold.

According to the Commodity Futures Trading Commission (CFTC) last week, net long positions in gold spiked 30% for the week ending August 15 to 179,537 contracts. This marks the fifth consecutive week of increases in net long positions, and is also the highest level of net long positions since prior to the 2016 US election.

If you have any questions and comments on the commodities today, use the form below to reply.

Leave a Reply