Conflict, Political Upheaval Continue to Drive Gold Prices Lombardi Letter 2017-04-18 13:00:43 gold pricesputinMOABU.S. Economyrex tillerson Current military actions and political conflicts around the world are sending gold prices soaring. Commodities https://www.lombardiletter.com/wp-content/uploads/2017/04/iStock-176780601-150x150.jpg

Conflict, Political Upheaval Continue to Drive Gold Prices

Gold Prices Benefit from Instability

Military action and political conflict are dominating the news, sending gold prices soaring.

Gold prices have hit $1,289 as flashpoints continue to flare up across the world. Diplomatic missions undertaken by the United States with China, North Korea, and Russia have been met with varying degrees of obstacles, stalls, and—in certain cases—total meltdowns. This sort of tension and instability usually drive investors toward gold, which is often treated as a safe-haven investment and a risk-management asset.

The U.S. also made use of the largest non-atomic bomb ever, when it dropped the Massive Ordinance Air Bomb (MOAB), also known as the “Mother Of All Bombs,” on ISIS fighters in Afghanistan. Such a move was seen as further evidence of escalation in the troubled and war-torn areas of the country.

The Middle East has also experienced rising tension, as the U.S.—for the first time—directly bombed a Syrian government target in early April. This was done in response to the chemical attack allegedly carried out by Syrian forces on civilians, although some sources dispute the origin of the chemical weapons.

U.S. Secretary of State Rex Tillerson was dispatched to Russia earlier in April, although the visit seemed to have little effect on bilateral relations. Russian officials have been claiming that ties between the two nations have only deteriorated since the election of President Donald Trump. (Source: “Putin says U.S.-Russia ties worse since Trump took office,” Reuters, April 12, 2017.)

The U.S. has also begun threatening the nuclear-armed North Korea with military action, and has been urging China to exercise more control on what is widely considered to be a rogue nation. The possibility of a nuclear conflict, alongside a multitude of problem areas spread around the globe, will likely continue to push gold prices higher, even with a surging U.S. economy.

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