The gold price is under pressure today after news that Donald Trump has agreed to meet North Korean President Kim Jong Un which marks a huge step in what many say is the beginning of denuclearization of the North Korean peninsula.
Gold has benefited greatly in recent times on the threat of war between the US and North Korea as investors snapped up the precious metal as a safe haven asset and now those gains are under threat in light of the planned meeting.
Some say however it is too early to Jump to conclusions as North Korea has a history of failing to keep to promises and President Trump is likely to put stringent demands on the North Korean leader that he will not want to abide by
"The US will be pushing for total denuclearization and South Korea has also said that it is their main objective," said Bruce Bennett, an analyst at the RAND Corporation.
"But it's important to remember that Mr Kim has said over and over again that they will not give up their nuclear weapons." He added.
If the talks breakdown or no agreement is reached some predict that the situation will become much worse than where we stand today and gold will quickly rebound as the threat of war becomes bigger than ever.
“A word of warning to North Korean President Kim Jong Un, the worst possible thing you can do is meet with President Trump in person and try to play him,” noted Republican Senator Lindsey Graham
“If you do that, it will be the end of you - and your regime.” He added.
The short term focus for gold is the release of the non-farm payrolls figure and unemployment rate due for release from the US later today.
A strong number will guarantee the US Federal Reserve will lift interest rates later this month and a disappointing figure may cast doubt over a potential rate hike which may give gold a temporary reprieve.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this broker. Before deciding to trade foreign exchange you should consider whether you understand how CFDs work, your investment objectives, your level of experience and readiness of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.
|By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.|