Gold shines even brighter through darkening geopolitical clouds

Reuters, via Nikkei/Mariko Tai/05-02-17

Investors continue to pour their money into the safe haven of gold, pushing net long positions of the precious metal to their highest level in five months.

Amid rising tensions over the nuclear issue on the Korean Peninsula, surprise missile strikes in Syria and the first round of the French presidential election, investors have felt little need to pull out their assets out of the precious metal. Instead, a series of events have led net long positions of gold to reach 200,677 contracts, or 624.2 tons, as of April 25, up 2.5% from a week before, according to the U.S. Commodity Futures Trading Commission. The position marks the highest level since early November last year.

Meanwhile tensions on the Korean Peninsula remain, as North Korea on Monday suggested that it would continue its nuclear weapons tests despite repeated warnings from U.S. President Donald Trump.

PG View: The price pullback since the last reading on net longs may just be position squaring ahead of tomorrow’s Fed policy statement.