Goldman Sachs: Trump stay behind gold growth, not North Korea

Despite numerous claims, tensions in North Korea are not really what makes gold grow with such power. Instead, Goldman thinks that this rally was born by President Trump - but is on way to fade. The spot price of gold reached $1342.90 this week, these being the highest figures in a year.

Some of the metal profits coincided with the increased tension on the Korean Peninsula, including when North Korea conducted a successful hydrogen bomb test. The bank, however, thinks that the events in Washington over the past two months have played a much greater role in the gold rally, followed by the weak dollar, Hurricane Harvey and the possibility of raising interest rates. These events have up to 85% of the growth in recent weeks. Goldman says that we can see higher gold values ​​only if North Korea is able to hit the city. The bank's forecasts remain the same, expecting gold to trade around $1250 at the end of the year.

With regard to the future development of the problem in North Korea, the bank is of the opinion that there will not be a retaliatory blow, but the country will not give up its nuclear program as it is their security guarantee.

Currently, gold is traded near tops at a price of $1338 per troy ounce, with no technical indications of a downturn.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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