NoKo – Nomas

In Spanish Nomas simply means ‘no more.' This seems as if it relates to NoKo (North Korea), which means no more reaction or action from the United States administration, at least not yet.

About the only statement coming out of the White House this morning by the president regarding North Korea was his statement that this “situation will be handled,” whatever that means or implies.

This comes in response to a missile test by North Korea early on Wednesday. Having a flight time of over 50 minutes, this missile could have flown as far as the mainland United States if sent on a different trajectory.

As reported by Jim Wyckoff of Kitco News, “The world marketplace, including safe-haven gold, did not react significantly to news late Tuesday that North Korea launched another ballistic missile—one the U.S. military said could reach anywhere in the world. The U.S. has called an emergency meeting of the United Nations Security Council, after the North Korea missile launch.”

It is not only the president but the collective market sentiment of investors and traders that have minimized this event.

In an interview with MarketWatch, Craig Erlam, senior market analyst with Oanda said, “Not so long ago, the threat of escalation caused by such action would send investors fleeing for safe havens, but as time has gone on and nothing has escalated beyond tough talk, investors have become less sensitive to the tests. Even gold, the traditional safe haven, has seen only minor flows on the back of the launch and continues to trade below $1,300, which has been a notable resistance level for the yellow metal.”

Gold Reacts to a Robust Economy and a Major Uptick in Consumer Confidence

Gold has been trading under dramatic pressure, and as of 3:15 PM Eastern standard time gold futures are currently trading off by $10.90, fixed at $1284 per ounce. This is a decline of just over 8/10 of a percent. Much of this sharp decline is attributed to solid economic data resulting in consumer confidence going to a 17-year high. With GDP currently residing at 3.3% and the real potential for a tax cut which could be voted on as early as next week, the bears at least for now are fully dominating the action in the gold pits.

This can be further illustrated by viewing spot gold which is currently trading at $1284.70, which is a net loss of $8.70 on the day. On closer examination, we can see that a weakening U.S. dollar has contributed $0.65 of gains, and normal trading has resulted in a decline of $9.35, according to the Kitco Gold index (KGX).

It seems quite evident that market participants are reacting in a much stronger manner to data and bullish economic news which has a bearish influence on gold pricing. Meanwhile, there is a muted, almost a “boy crying wolf” reaction to a North Korean missile test which by all accounts is the most advanced intercontinental ballistic missile fired yet. This type of missile could easily fly far enough to hit the U.S. mainland.

As far as I’m concerned NoKo missile tests, Nomas.

Wishing you as always, good trading,