A War of Words 2.0
The war of words between the United States and North Korea has now accelerated to a new and more dangerous level of concern. Recent statements and threats made on the part of North Korea have escalated the current tension and hostility between our two countries.
Last week, in his first address to the United Nations, President Donald Trump stated, “The United States has great strength and patience, but if it is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea. Rocket Man is on a suicide mission for himself and for his regime. The United States is ready, willing and able, but hopefully this will not be necessary.”
North Korean response to this message began as a televised message from Kim Jong-Un, in which he called the president of the United States “mentally deranged.”
According to CNN, “North Korea's Foreign Minister Ri Yong Ho on Monday accused U.S. President Donald Trump of declaring war on his country by tweeting over the weekend that North Korea won't be around much longer."
This tweet was interpreted by the North Korean government as a declaration of war, as Minister Ri Yong Ho added, "Since the United States declared war on our country, we will have every right to make all self-defensive countermeasures, including the right to shoot down the United States strategic bombers at any time even when they are not yet inside the aerospace border of our country.”
However, the White House Press Secretary Sarah Sanders said that the U.S. has not declared war on North Korea, stating the suggestion of that is absurd. Regardless, tensions continue to rise, as this war of words escalates to a new level.
Both spot and futures pricing of gold have spiked up strongly on the day. As of 4:30 EDT, spot gold is trading up $12.30 on the day. This dramatic spike has been tempered by a strong U.S. dollar today, which resulted in a $-7.40 of value per ounce. Normal trading today bid up the precious yellow metal by $19.70 resulting in the net change of gold of $12.30, fixing spot gold prices at $1309.40. This information comes according to the Kitco Gold Index.
Gold futures are also trading dramatically higher, and basis the most active December contract gold is trading up $15.60 for a net gain of 1.2%, settling at $1313.20 on the day.
Inasmuch as the tension between North Korea and the United States has escalated to a new level, it is still for the most part based upon threats and rhetoric from both sides. Inevitably it seems more and more unlikely that this current crisis will result in the peaceful resolution of the conflict.
Wishing you as always, good trading,
Gary S. Wagner - Executive Producer