Gold hit a near two-month peak on Wednesday, after North Korea said it is considering an attack on the U.S. Pacific territory of Guam and U.S. president Donald Trump boasted of the strength of the American nuclear arsenal. The tensions rattled through global markets, sending investors out of equities and into the safety of the yen, Swiss franc, and government debt. The VIX “fear gauge” of expected volatility on the S&P 500 hit a one-month high .World stock markets, including the U.S. stock indexes, sold off Wednesday on the heightened U.S.-North Korea tensions. Gold hit a two-week low on Tuesday after U.S. jobs data came in better than expected and the dollar turned positive, while investors awaited U.S. inflation figures later this week for further clues about the pace of interest rate rises. For the session Gold rallied $16.70 to close at 1279.3. September silver closed at 1694.5 up a sizable .55 cents. Both markets began to rally late Tuesday afternoon shortly after President Trump gave his “fire and fury” speech. Clearly we are seeing fear gauges bid up in response and as such gold and silver are leading the way. Should tensions ease somewhat in the coming days, this could be a near term rally to sell into. However I wouldn’t anticipate that into this weekend unless something else entered into the market that eases tensions.
Resistance for December gold is first at 1288.6 and then yearly highs at 1298.8. Support sits just below here at 1276.6 and then at 1268.2. For September silver, resistance is up at 17.25 and then up at 17.51. Support sits down at 16.75 and then down at 16.46.