Gold to Remain Well Supported

The gold price is treading water today after rising sharply in the previous trading session, on the back of rising tensions between the US and Russia over the fate of Syrian president Bashar Al Assad after last week’s chemical weapons attack.

At 13.34am, (GMT) gold was trading at $1,277 slightly up from $1,274 in yesterday’s trading session.

US secretary of state Rex Tillerson is currently in Moscow trying to broker a deal that would see Russia drop their support for Assad in the civil war, which has claimed thousands of lives and displaced many more.

If no deal is reached, the gold price is likely to continue to climb as the possibility emerges of further military action by the US against Syria, which many believe will destabilize the whole region and lead to full-scale war.

On another front, the US is also piling pressure on China at the moment to reign in North Korea and their nuclear weapons program, with US president Donald Trump threatening to apply trade barriers if China can’t bring their staunch ally under control.

To show that he means business, President Trump ordered the USS Carl Vinson aircraft carrier and its battle group to sit in waters off the Korean Peninsula as a deterrent to North Korea’s nuclear ambitions

“A degree of uncertainty has found its way into previously seemingly bulletproof financial markets,” wrote analysts at ANZ.

“There is clearly some nervousness out there, with tensions around North Korea ratcheting higher and adding to an already heightened geopolitical environment. Global cyclical assets have not yet responded, but that can’t last.” They added.

Gold is likely to remained supported over the next 2 weeks in the run up to the French presidential election with a real possibility that Euro sceptic contender Marine Le Pen may pull of an upset, which will only lead to more tensions in the Eurozone and leave investors flocking to safe haven assets such as gold,

“The presidential election in France is surely the most prominent event for spring and a potential victory for Marine Le Pen, and the Front National, would be perceived as a key geopolitical risk for the Eurozone as a whole,” said Monica Defend, head of global asset allocation research at Pioneer Investments.

The review was prepared by FIBO Group analyst Andrew Masters.