Fundamental Analysis

Gold Hits Hits $1300 after Barcelona Attack

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Gold prices continue to push higher. In the Friday session, gold punched past the $1300 level, before retracting. In North American trade, spot gold is trading at $1287.15, down 0.04% on the day. On the release front, it's a quiet end to the week, with just one key event on the schedule. UoM Consumer Sentiment improved to 97.6, beating the estimate of 94.0 points.

Geopolitical crises often have a strong impact on gold, which, as a safe haven asset, tends to rise when risk appetite is down. This was the case this week, with gold showing considerable volatility. Early in the week, gold prices dropped, as tensions between the US and North Korea eased. The crisis reached a fever pitch last week, as the saber-rattling between Washington and Pyongyang sent gold prices higher. Gold finds itself again in demand following a deadly car-ramming attack in Barcelona, Spain on Thursday. The terror attack killed 12 and wounded dozens, and the flight from risk towards gold sent the metal above the symbolic $1300 level on Friday, for the first time since November 2016.

In the US, political risk continues to rise, which is weighing on the US dollar. President Trump's administration continues to spend most of its focus and energy on damage control, and has failed to pass any major legislation through Congress, even though the Republicans control both the House and the Senate. The latest fiasco for Trump has been the alt-right protest in Charlottesville, where one protester was killed by a suspected white supremacist. Trump's belated condemnation of white supremacists and his insistence on blaming the violence on both the white supremacists and the counter-protesters has drawn wall-to-wall criticism from both Democrat and Republican lawmakers. Trump remains defiant and continues to attack his critics, but the events around Charlottesville have only served to tarnish his image and raised growing concerns about his presidency.

Author: MarketPulseWebsite: http://www.marketpulse.com/
MarketPulse
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