We are going to explain how hurricanes, missiles and statements of political leaders influenced gold last week.
On Tuesday 12th, the stock market did not experience any major shocks due to relative calmness in North Korea. There were no new statements and dangerous launches of missiles, while the United Nations came out with a demand to tighten the measures against North Korea.
Representative of the United States in the UN, Nikki Haley:
"We're trying every other possibility that we have, but there's a whole lot of military options on the table.”
The tension in the world was created by the hurricane Irma which had a devastating impact on Florida and island states. The price per ounce of the precious metal reached $1,326 on Tuesday.
On Wednesday 13th, gold prices began to rise, and experts predict a further rally. Gary Wagner, KITCO analyst, noted that the price of gold would advance by $100 in August, reaching a new record level of $1,363 by the end of the year.
On Thursday 14th, gold rates increased up till $1,329 per ounce in regard to another North Korean threat and missiles launch.
Minister of the Government of Japan Yoshihide Suga claimed that from the very moment of launching to the very end of the missile flight, national self-defense forces controlled the situation in full and kept track of the missile. The provocative policy of North Korea affects stock markets and makes investors prefer safe assets.
On Friday 15th, reports on inflation in the US were analyzed, which stimulated the fall of the dollar. However, before the upcoming Fed’s meeting, the market faced certain corrections and the dollar regained its positions.
Senior advisor at Barclays, Richard Fisher, noted that one more rate hike this year might happen in two months:
“I do think the Fed has made it clear they're going to start reversing the sign on the balance sheet. It's a very gradual process. They'll probably start in September and they still have room to increase the short rate 25 basis points.”
Clarity will be achieved on September 19th and 20th when the Fed will hold a meeting. The price of gold at the end of the week fell to $1,319.
On Monday 18th, the precious metal prices lost a bit and lowered to $1,317.
After the Friday launch of missiles by North Korea, the UN Security Council made rather harsh statements. US Representative in the UN Nikki Haley:
“If North Korea keeps on with this reckless behavior, if the United States has to defend itself or defend its allies in any way, North Korea will be destroyed, and we all know that and none of us want that.“
Despite the difficult situation in the world, the precious metals market is under pressure. The most important upcoming event is the Fed meeting, and analysts estimate the chance of the rate hike decision at 46%.
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