Tuesday, March 6, 2018

Gold jumps higher by over 1% and silver by over 2% at start of trading session due to rumors coming out of Korea

There are always a few catalysts that can drive up the gold price on any given day.  And just some of these can include the rising feat of inflation, the central bank hinting at more money printing (Quantitative Easing), or a geopolitical event that is strong enough to cause the dollar to drop.

Tuesday morning appears to be one of those days where an interesting geopolitical event at the start of the market session has stimulated the gold and silver prices higher at the same time the dollar has lost the 90 handle on the index and itself moved lower by .4%.

Gold price +$15  +1%

Silver Price +$.38  +2%

The headlines come from South Korean National Security Office special envoy Chung Eui-yong, who is speaking to reporters in Seoul after returning from Pyongyang. Remember he and another envoy, National Intelligence Service chief Suh Hoon met North Korean leader Kim Jong Un in Pyongyang on Monday. Chung confirms that North Korea is indeed ready to stop the jawboning and negotiate: 
  • Kim Jong Un open to frank talks with U.S. for denuclearization: Chung
  • North Korea to suspend provocations during talks: Chung
  • Promises not to use any weapons against South Korea: Chung
Next step: a summit in April between the two neighbors where details will be ironed out: "North Korea, South Korea agree to hold summit in April", Chung says. Pyongyang vowed not to test any ballistic missiles or make further provocations during talks, according Chung clarified. 
The easing of tensions between the two Koreas and this clearly positive geopolitical development has triggered a broad based risk-on move. 
Fixed income is selling off sharply here, with Bunds flying. As the spot KRW market is closed, the NDF space is in focus. The 1m NDF has traded from 1076.0 to 1070.8 at time of print. USDJPY is spiking higher at 106.10 at print. This move may have legs especially as early NY begins to come in - Zerohedge


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