Market Volatility Around North Korean Tension Spurred Gold Rally This Week
Volatility Around North Korean Tension Spurred Gold
This week, volatility around North Korean tension spurred gold into a rally. Gold opened the week at at $1257 and closed $30 higher. On Thursday it hit $1290. Silver also rallied, closing the week at $17.10.
The news came out this week that North Korea has the capability of fitting a scaled nuclear warhead to its missiles. North Korean leader Kim Jong-Un claimed that the DPRK could imminently fire its missiles towards Guam – the U.S. island territory that hosts three military bases. The White House and Pentagon responded with assurance of a response of “fire and fury” and that the U.S. was already locked and loaded should North Korea make good on its threat.
What this means for investors:We have had fiery rhetoric along with ballistic missile tests coming out of North Korea for some time now . However the talk seems to be rapidly intensifying now. Gold is set to test the year’s highs after holding support at the 50 and 100 day moving averages. Silver is likewise poised to test new highs.
The VIX was up 44% Thursday – Highest Level in Nearly a Year
Predictably, the VIX surged this week. It was up 44% and wrought havoc on some investors’ portfolios. In fact, it was at its highest level since the November presidential election. The VIX measures volatility, so it is unsurprising that the geopolitical tensions this week caused it to spike.
What this means for investors: The spike in the VIX had investors rushing for safe haven protection. Gold and silver are already in a bull market, and now there is a renewed demand because of even greater levels of geopolitical uncertainty.
Dennis Gartman on the Market Slump This Week
Of course, with so much uncertainty and volatility skyrocketing, the markets sunk this week. European markets were all plunging Friday and the Dow Jones and S&P fell their lowest weekly percentages in five months.
What this means for investors: Check out what Dennis Gartman had to say about gold’s upside, and why you should probably increase gold holdings now.
I think gold is about to break out to the upside: Dennis Gartman from CNBC.
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Here are some articles from the web discussing the topics in this week’s post:
Volatility Around North Korean Tension Spurred Gold
VIX Up 44% – 3 Month High
Dennis Gartman on the Gold Bull Market and Market Slump
As always, I encourage you to speak with your broker at RME for more market updates. Expert brokers are available Monday-Friday from 9 AM- 5 PM or by special appointment after hours. Call today at 602-955-6500 or toll-free at 877-354-4040.
