Metals Higher as Global Tensions Escalate

Gold and silver prices are solidly higher and have hit two-week highs in early U.S. trading Tuesday. Gold bulls are once again knocking on the door of the key $1,300 level. Heightened geopolitical tensions early this week have boosted these two metals. Also, short-covering in the futures markets by weak-handed bears is further lifting gold and silver prices. December Comex gold was last up $9.80 an ounce at $1,294.10. December Comex silver was last up $0.244 at $17.215 an ounce.

Geopolitical worries are ratcheted up another notch on reports U.S. President Donald Trump will stop at the North Korea-South Korea demilitarized zone to deliver a strong anti-North Korea speech, during his Asia trip next week. Also, U.S. Defense Secretary James Mattis reportedly told his Army officers to be ready, in case U.S.-North Korea negotiations fail.

Meantime, the European Union is worried and its stock markets are shaky regarding Catalonia possibly seceding from Spain. The Catalan regional president is scheduled to give a speech Tuesday, in which he may announce his intention to separate Catalonia from Spain.

The U.S. dollar index is lower again in early U.S. trading, on a corrective pullback from recent gains. The weaker greenback early this week is also working in favor of the precious metal market bulls.

The other key outside market on Tuesday morning sees Nymex crude oil futures prices higher and just above the key $50.00 level. Reports said Saudi Arabia plans to cut its crude oil exports in November.

Traders and investors are looking ahead to what is arguably the most important U.S. data point of the week: Wednesday afternoon’s minutes from the latest FOMC meeting. Most of the marketplace now expects the Federal Reserve to raise interest rates by 0.25% at the December FOMC meeting.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza