We have tracked gold prices changing this week, and it is political drama to blame.
On Tuesday 3rd, the foreign policy situation began to balance due to a surge in activity in Catalonia and the desire of its inhabitants to achieve independence. Fitch made a statement about the situation in Spain, comparing this national uncertainty with "a massive political challenge for the country." European indices increased, the price of the yellow precious metal reached $1,271.
President of the Federal Reserve Bank of Minneapolis Neel Kashkari spoke against another increase in the interest rates:
“My preference would be not to raise rates again until we actually hit 2% core PCE inflation on a 12- month basis.“
He believes that there are certain reasons for inflation slowdown:
“Monetary policy wasn’t as stimulative as hoped for and the main effect of the moves was to cause falling inflation expectations, and somewhat slower job growth, wage growth and inflation.”
On Wednesday 4th, the Catalan leader Carles Puigdemont announced political changes to happen in the near future. Catalonia is ready to declare independence "by the end of this or the beginning of the next week."
The world remains unstable because of provocations of North Korea. Young Sook Lee, Deputy Director Assistant of the CIA mission center for responding to the North Korean threat, announced the date of the new military exercises by the DPRK. North Korea intimidates Japan with "nuclear clouds" and promises to test missiles on October 9th. America and Japan decided to unite their actions to oppose the DPRK.
Press Service of the White House:
"The leaders expressed the desire to continue close coordination on a number of issues, including North Korea, on the eve of the US president's visit in November."
Gold prices rose that day to $1,275.
On Thursday 5th, the price of gold was affected by the threatening policies of the DPRK and statements by experts who confidently spoke about the impending financial crisis.
Mark Kolanovich, analyst at JPMorgan:
"At the moment, central bank balances exceed $15 billion. Reduction can lead to large sales in the stock market which will result in a new financial crisis."
World Bank experts note the likelihood of a debt crisis in China:
"Shadow banking creates additional vulnerabilities in the financial sector."
The lack of stability affects the advancement of the precious metal, which was worth $1,268 per ounce.
On Friday 6th, world news media reported on "mysterious" statements by Trump. The day before, the American leader held a meeting with representatives of the military command. After discussing the issues under the treaty with Iran, Donald Trump stressed the need to annul this agreement. The US president promised to do what needs to be done so that "Pyongyang does not threaten the United States and its allies."
Donald Trump estimated the outcome of the meeting as follows: “Maybe it's the calm before the storm.”
That day, IMF Head Christine Lagarde said that she supported the actions of the ECB and the Bank of Japan. In her opinion, these countries do not need changes as the situation develops in the direction of supporting business and investment.
Gold prices stopped at $1,276.
On Monday 9th, the cost of the precious metal was influenced by previously published data on the US labor market. Because of the hurricanes that hit the United States, the number of employed has declined, which was mostly reflected in the non-agricultural sector. The dollar began to lose its positions.
Morgan Stanley analytics foresee the euro enhancement:
"In the short term, the euro could see a correction, as markets continue being nervous about the Catalan plan to declare independence."
The situation on the market remains tense. On October 10th, Korea marks the anniversary of the Labor Party establishment, which is a good occasion to celebrate with a rocket launch.
Deputy Director Assistant of the CIA Young Sook Lee warned everyone:
"Be alert and keep your phones next to you."
All this tension promotes the growth of gold prices, which reached $1,283 on Monday morning.
Experts at Metals Focus note that the average price of gold in 2017 is $1,252 per ounce. Analytics expect the value of gold to increase to $1,400 per ounce in 2018.
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