Morning Snapshot: Gold more than $30 off Friday’s low

USAGOLD/Peter Grant/10-10-17

Gold extended to the upside in overseas trading amid rising geopolitical risks and mounting concerns that the President is going to have difficulties passing tax reform. The yellow metal is up more than $30 since hitting an 8-week low at 1260.10 on Friday.

Catalonian President Puigdemont is slated to address parliament today and is expected to declare independence from Spain, or at least a movement toward independence. Spanish PM Rajoy has vowed that “Spain will not be divided” and that he is prepared to employ “all means” within the law to preserve national unity.

Bloomberg has reported that Spanish National Police are in place and prepared to arrest Puigdemont. If the Catalan police attempt to shield Puigdemont, there is the risk of violence. However, it is the longer-term and broader implications for Spain and Europe that are of concern to markets.

The Hill reports this morning that based on recent rhetoric, Kim Jong Un may believe that a U.S. decapitating strike is imminent. That may prompt the North Korean leader to launch a preemptive strike.

There is growing concern that President Trump’s tax reform plan is losing momentum. This had been a big driving force in the stock market rally as investors salivated over the proposed corporate tax cut. This is a must-win issue for the President, given the failure of repeal-and-replace and the lack of progress on immigration reform and the the wall.

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