The gold price hits 11-month high, expectedly opening high and continuing to rise at the moment after North Korea conducted hydrogen bomb test. Gold has been increasing for almost two months at a pretty high speed amid a launch of midrange ballistic missile designed to carry a nuclear payload that flew over Japan and splashed into the northern Pacific Ocean.
North Korea conducted its sixth and most powerful nuclear test on Sunday, announcing that was an advanced hydrogen bomb for a long-range missile, and resulting the threat of a massive military response from the United States and South Korea.
Early Monday in Seoul, South Korea’s military confirmed it had carried out missile drills in response to the bomb test. U.S. Treasury Secretary Steve Mnuchin said on Sunday that he would put together a package of new sanctions to potentially cut off all trade with North Korea, including banning Pyongyang’s textile exports and country’s national airline, stopping oil supplies to the government and military, preventing North Koreans from working abroad and top officials to a blacklist to subject them to an asset freeze and travel ban.
The latest nuclear test is likely to pile more pressure on China to take tough action against its neighbour, but Beijing questioned economic sanctions will work and says it is not its sole responsibility to rein in Pyongyang.
The U.S. dollar index continued to decline as reports showed employment situation in U.S. is not losing its gaining momentum. As the fact that it disappointed for those looking for higher inflation, the market and Fed will remain in “wait and see” mode for the course on rate hike.
On last Friday, Nonfarm payrolls rose by 156,000 below the median estimate of 180,000, and revisions for the prior two months subtracted 41,000 jobs, according to Labor Department data on Friday. The unemployment rate rose to 4.4 percent from 4.3 percent.
Technically the gold price is still in its gaining momentum amid North Korea’s bomb test but facing a key resistance ahead found at Nov. 9’s high of 1337.13. The formation of positive flag is showing an increasing trend. In the event that failing to break out of the key resistance ahead, it likely retreats to 5-day moving average.
Chart 1: XAUUSD Daily
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