Unresolved tensions between the U.S. and North Korea are still very much on the table and can boost gold prices even further, according to a recent Capital Economics report.
“Until there is some certainty as to how the current situation between the U.S. and North Korea will evolve, we think that gold prices are likely to remain well supported and could even rise above $1,350 per ounce, which hasn’t been breached since the Brexit referendum last year,” Simona Gambarini, the U.K.-based research firm’s commodity economist, said Tuesday.
Yet, if the conflict should ever develop into “a full-blown war,” then gold will likely see “some profit-taking,” Gambarini added.
And, in case the U.S.-North Korea conflict simply fizzles out, the focus will shift to the Federal Reserve and its plans to reduce its balance sheet and tighten monetary policy further.
Reference: Kitco
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