Gold broke above $1,300 last week and is on a steady rise as tensions continue to rise between North Korea and the U.S. Some market experts now predict the precious metal could strengthen further.
"There is a combination of events driving gold higher, including both political uncertainty and hedge fund buying. If these extreme political circumstances continue it could drive the price to $1,400," Nizam Hamid, ETF strategist at WisdomTree said in a press comment on Thursday.
The current period of elevated uncertainty, both in terms of U.S. domestic policy and in foreign diplomacy, is supporting gold prices.
As gold is priced in U.S. dollars, it is sensitive to U.S. interest rates. Recent data weakness is driving concerns that the Federal Reserve may delay hiking interest rates in the short term, which is weakening the dollar and supporting gold.
Gold is currently trading around $1,340 per ounce. It is up 2.45 percent over the past seven days and year to date is up around 16 percent.
Source: Bloomberg Pro Terminal
Junior Trader Stefan Panteleev
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