Gold Prices Aided by Instability
Following what was a relative period of calm on the international political stage, missile tests by North Korea, a global cyberattack and American turmoil in the wake of the firing of FBI Director James Comey have all contributed to a rise in gold prices.
Gold came in at $1,299 an ounce after experiencing a slight uptick on Monday. The yellow metal has been locked in a tug of war for some time now, as competing items in the news have often had opposite effects on the price of the commodity.
On the positive side for gold, a number of developments last week helped the precious metal recover from what was a dismal April month.
North Korea has once again gained prominence in the news, due to a missile test which has renewed tensions with the United States.
A worldwide cyberattack also helped push interest in gold, as many prominent companies and personal users alike were shown just how vulnerable their digital information is.
A final boon to gold prices was the firing of FBI Director Comey by U.S. President Donald Trump. The move has sparked outrage among political members of the left and some on the right in the United States. Comey and the FBI were overseeing the investigation into whether Trump had ties to the Russian government, and whether those ties had affected the U.S. presidential election.
Conversely, gold was hurt by a more hawkish tone adopted by the U.S. Federal Reserve last month, as well as strong numbers concerning U.S. employment. The level of employment is one of the key factors that the Fed takes into account when choosing whether or not to raise interest rates.
When interest rates do rise, gold value often suffers, as it is a non-interest yielding investment, whereas interest rate hikes tend to boost government bonds, which do carry interest for investors.
Interest rates are now expected to almost certainly rise in June, when the Fed is set to meet next.