Summarize:
* North Korea tensions aren't what's driving the rally in gold, Goldman Sachs said in a note on Tuesday
* Instead, Goldman said the rally was mainly due to uncertainty inspired by President Donald Trump
* It said it expected that uncertainty would fade, weighing on gold prices
Despite many claims to the contrary, North Korea tensions aren't actually what's driving the rally in gold, Goldman Sachs said in a Tuesday note.
Instead, the bank said, uncertainty inspired by President Donald Trump has boosted the yellow metal — but that's set to fade.
Spot gold has certainly rallied of late, climbing from levels under $1,212 an ounce in July to as high as $1,342.90 this week, touching its highest levels in around a year, according to Reuters data.
Gold, which traditionally acts as a safe-haven play when investors turn nervous, was at $1,338.50 an ounce at 9:41 a.m. HK/SIN on Wednesday.
Some of the metal's gains have coincided with increased tensions on the Korean Peninsula, including when North Korea claimed a successful hydrogen bomb test on Sunday.
Goldman, however, didn't think the gold rally was unrelated to the North Korean tensions, just that it only explained around $15 of the more than $100 rally.
"We find that the events in Washington over the past two months play a far larger role in the recent gold rally followed by a weaker dollar," it said, adding that's the reason the yellow metal likely wouldn't hold its gains.
Barring a "substantial" escalation of North Korean tensions, Goldman said it was sticking with an end-of-year gold forecast of $1,250 an ounce.
Reference: CNBC
Read More: https://www.cnbc.com/2017/09/
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