The gold price has levelled off today after rising for the pass 5 trading sessions and leaving analysts divided on the future direction of the precious metal.
At 4.20pm (GMT) gold was trading at $1,283 , slightly down from $1,286 in yesterday’s trading.
As the US gears up to confront North Korea over its nuclear weapons program by sending warships towards the area, the chance for gold to make further gains is a real possibility, as the yields on Treasuries decrease and investors seek out higher returning assets
As a flight to safety into U.S. Treasuries comes in and yields continue to compress, gold becomes a lot more attractive, noted Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management said,
I do think with the Trump administration and with the militarization that's going on right now, the risk is very high, so gold does have the chance to go further.
Another factor supporting the gold price at the moment is recent comments Trump that the level of the US dollar was too high causing investors to exit the greenback and move their money into other assets. Brien Lundin, editor of Gold Newsletter said,
"Gold had been trading higher based upon geopolitical tensions,” including those between the U.S. and Russia and North Korea, but “what gold really needed to keep its rally going was some sort of a fundamental monetary driver. Trump graciously provided that with his comments calling for a weaker dollar and continued low-interest-rate policies. Over the longer term, the path higher for gold has been somewhat cleared by Trump’s acknowledgment of the dovish monetary policies they will pursue, and the metal seems likely to build upon its gains in the weeks ahead."