Gold is consolidating after tests of the upside earlier in the week faltered ahead of $1300. The highs from Monday and Tuesday at 1292.30/1295.46 now provide intervening resistance.
The underlying bias remains positive, given heightened geopolitical tensions and the looming French elections. The first round is to be held this coming Sunday and the run-off between the two top finishers is slated for May 5.
Of the five candidates, two have pretty strong anti-euro leanings and have pledged to hold a Frexit referendum if elected. Those two candidates are Marine Le Pen and Jean-Luc Melenchon. The former has been a front-runner throughout the campaign, but the latter has made a late surge. Centrist europhile Emmanuel Macron has been the other front-runner and he would be the choice of those in Brussels . . . if they could vote.
Right now, the race is too close to call, which could make this a very exciting weekend. The European press and polling has pretty consistently believed that Le Pen and Macron will advance to the final and that Macron will ultimately prevail.
However, hearkening back to the U.S. election in November, we all know how wrong the press and polls can be. Perhaps even more-so than U.S. voters, the French are fed-up with the political status quo; both in Paris and in Brussels. This could be an exciting couple of weeks.
U.S. Secretary of State Rex Tillerson is reportedly considering putting North Korea back on the list of State-sponsors of terror. That would further isolate Pyongyang and either force them to negotiate, or prompt them to lash out.
“We are reviewing all the status of North Korea both in terms of state sponsorship of terrorism, as well as all the other ways we can bring pressure to bear on the regime in Pyongyang to re-engage, but re-engage with us on a different footing than the past talks have been held,” Tillerson said. That last part means that the U.S. is no longer willing to exchange aid for nuclear concessions.
North Korean responded by threatening a “super-mighty preemptive strike,” which suggests they are not ready to come to the bargaining table just yet.