Gold has extended to the upside in the wake of yesterday’s convincing breach of the $1300 level. The yellow metal has gotten an additional boost from heightened geopolitical tensions after North Korea fired a ballistic missile that flew over Japan.
President Trump has warned that “all options are on the table.” Japan’s PM called this significant escalation of tensions “a most grave threat.” This has created a risk-off environment, pushing stocks lower and boosting the yen, Swiss franc, Treasuries and of course gold.
The dollar index has fallen through key support at 91.92, reaching levels not seen since January 2015. The implications for the greenback are quite bearish, which in turn bodes well for gold.