Gold seems to hold its gain as North Korea threaten to accelerate nuclear plans in response to UN sanctions and European equities fall with the dollar.
Market sentiment was mildly supported as Hurricane Irma appeared to have caused less damage than feared and in the absence of any new provocations from North Korea.
Irma, which had hammered the Caribbean late last week and was one of the most powerful Atlantic hurricanes, weakened to a tropical depression, easing concerns over the severity of its financial impact.
Market participants seemed to shrug off North Korea’s rejection of sanctions imposed by the U.N. Security Council.
The Security Council voted unanimously on Monday to step up sanctions on the peninsula, in response to its sixth nuclear test.
However, U.S. President Donald Trump said Tuesday that the U.N. sanctions were a “very small step” and “nothing compared to ultimately what will have to happen” to combat the regime’s nuclear program.
The precious metal also benefitted from a weaker U.S. dollar on Wednesday after data showed that U.S. producer price inflation and its core reading increased less than expected in August.
Gold trades in an upward trend line according to the Bloomberg 4H Chart.
If there is a continuation of the bullish momentum, the commodity could break out above 1336 and possibly extend more gains toward 1341.
In the case of a bearish scenario, gold could fall back toward the 1326 and extend losses through 1321.